Divorce and Settlements: What is classed as matrimonial assets?
Matrimonial assets are those assets that are acquired by either one or both spouses during the marriage. The assets might be the matrimonial home or other property, shares or other investments and savings as well as money invested in pensions or in a business.
The family or matrimonial home takes centre stage for most couples and in the majority of cases is the largest asset in the family.
So what’s happens to the family home and indeed other assets that make up the matrimonial pot?
Any asset that is purchased with marital property will be classed as matrimonial property. For example either parties’ income will be classed as marital property.
In order to determine how the finances should be split when a couple divorce all assets which includes property, cars, savings and investments will be identified and valued to establish what needs to be divided.
Even an asset that is in the sole name of only one of the parties might form part of the matrimonial pot. Therefore, if one party has a second property in their name only, this property might in certain circumstances be deemed to be part of the matrimonial pot. Much depends on the specific circumstances relating to how the party acquired those assets.
A couple might be able to agree a valuation, but if they are not able to do so the Court will order that they instruct a joint estate agent to provide a market valuation.
In the UK there is no rigid formula on how assets are to be split on divorce however there is a broad starting point of 50:50. Various factors will need to be taken into account and this will include looking at what is fair for both parties especially if there are children involved. However the fairness test is objective and so the parties themselves may not agree as to what is fair.
If it is viable one spouse could buy the other spouse out alternatively the property could be sold and the proceeds divided up to allow both parties to purchase their own properties.
Often when there are children, one party will remain in the family home to try and keep a degree of stability in what is already a highly stressful time. In these situations the property is sometimes not sold until either the children have reached 18 years or the party living in the property either remarries or cohabits. You may have heard of the term “Mesher Order” being used to describe this process.
The drawback of such an Order is that the non-resident party cannot access his or her assets and frequently both parties’ names need to remain on the mortgage, making it difficult for the non-resident party to obtain a mortgage on another property.
Properties Abroad and Holiday Homes?
Again properties abroad and holiday homes will often be deemed to form part of the matrimonial pot, even if one party bought the property with their personal income.
However, this is not always the situation. For example, if a second home was bought using funds from an inheritance, this could be classed a non-marital property, which should not be divided between the parties. Despite this the Court may take non-matrimonial property into account where there is insufficient matrimonial funds available to meet the parties’ needs. The law in this area is complicated and so it is advisable to seek professional legal advice on your unique situation.
If you would like to find out more about divorce and settlements and the division of assets you can either call the office on 01202 802807 or book a no obligation appointment with our experienced family solicitor Jacqui Forrest.