Non-matrimonial property: what is it, and why is it under scrutiny?

Divorce|September 17th 2012

The phrase non-matrimonial property has been used increasingly in financial remedy cases. Last week it also featured in the Law Commission’s latest consultation paper, so let’s take a closer look.
In 2000, the case of White v White brought the concept of sharing assets sharply into focus. Until then, there had been no equality between the parties when dividing the assets in a marriage. Typically, wealthy wives would leave a marriage with about 30 per cent of the wealth – or in some cases, far less. There was the spectacular case of Dart v Dart in 1996, when the wife left her marriage with £8.5 million, out of a fortune of £400 million.
In White v White, the House of Lords introduced the sharing principle. Thus when both parties’ financial needs had been met, the starting point for the division of any surplus would be an equal division between the two parties, even if one party was the breadwinner and the other a homemaker. The House of Lords did not, however, divide the assets of Mr and Mrs White equally. The Whites were a farming family. Their Lordships gave Mr White credit for the introduction of capital into the marriage by his father. The assets were divided 62:38 in Mr White’s favour, even though Mr and Mrs White owned their farm equally.
The decision to make that award was arbitrary, but reflected the non-matrimonial contribution by Mr White’s father. The relevant law is paragraph 2(f) of Section 25 of the Matrimonial Causes Act 1973. This provides for the Court to “have regard to the contributions which each of the parties has made to the welfare of the family”, and it is up to the judge to decide what weight and importance to attach to the asset or assets in dispute.
Here, once again, we see the value attached to judicial discretion. It is for the judge to decide how to account for all the assets in a case, and how to divide them fairly between the parties in any given case.
The Law Commission is currently examining the case for change. On the subject of non-matrimonial property, the Commission has published the following statement:

We provisionally propose that non-matrimonial property, defined as property held in the sole name of one party to the marriage or civil partnership, and:

(1)    Received as a gift or inheritance; or

(2)    Acquired before the marriage or civil partnership took place

Should no longer be subject to the sharing principle on divorce or dissolution, save where it is required to meet the other party’s needs.

Since White v White, the practice of ring-fencing non-matrimonial assets, after needs have been met, appears to have grown. However this is not the law.
In Charman v Charman, Sir Mark Potter, the President of the Family Division, made it clear that all property is available for sharing. Using a short marriage as an example, however, non-matrimonial property is unlikely to be shared. Is that unfair? Is too much property therefore available to a spouse who was never intended to share in it and should not do so?
Here are some more questions. How easy is it to create a catch-all definition of non-matrimonial property, when  it can be transformed into matrimonial property? For example, take an inheritance of £250,000, used to buy a house in joint names. The house is later sold at a profit, and the proceeds are used to buy another house in joint names.  So how much remains as non-matrimonial property?
Consider the position if non-matrimonial property, such as pre-acquired shares in a public company, simply increases in value during the marriage. Does the other spouse get to share in that increase because it happened during the marriage?
What if a spouse owns a company prior to the marriage, and keeps working in that company throughout the marriage, supported by the other spouse, both of them substantively increasing that company’s value from the date of the marriage? Is the company entirely a non-matrimonial asset?
Then there is the family home. In Miller v Miller and Mcfarlane v Mcfarlane, it was stated that the family home should normally be treated as a matrimonial asset. However times have changed and, according to the definition above, there would also seem to be a change of law. The Law Commission has considered this, and the prospect of injustice if the family home was not able to be shared. So the Commission is asking consultees if the family home should be excluded from the definition of non-matrimonial property.
At the time of writing, all the assets are available for sharing but it is up to the judge, using his discretion, to decide how much each spouse will get.
So the issues to consider are these:

  • What is fair in relation to non-matrimonial property?
  • Should the law change to ring-fence non-matrimonial assets?
  • If so, how – particularly when the character of the asset has changed and is used by the family?

Some countries do not recognise non-matrimonial property at all. They include Sweden, the Netherlands and South Africa. However these countries have a default regime, which permits couples to contract into an acquest regime and separate their property before marriage.
Other countries have strict community of law, with separate property and definitions. In New Zealand, for example, there is the New Zealand Property (Relationships) Act 1976, and Sections 8-11 are worth a look.
The various arguments and recommendations are all detailed in the Law Commission’s lengthy paper, which makes for interesting reading.
In truth, however, the questions surrounding non-matrimonial property are resolved, it is unlikely that the vast majority of divorcing couples will be even slightly affected. In the majority of divorce cases, there simply won’t be enough to go around to meet needs – let alone leave a surplus.

Author: Stowe Family Law

Comments(20)

  1. Brock Williams says:

    Hi
    Great article. I just wanted to know the case which introduced the concept of non-matrimonial property and some others which have delved into the subject.
    Thanks

    • Marilyn Stowe says:

      Dear Brock
      Take a look at White v White, heard in the House of Lords and read the judgement of Lord Nicholls.
      Regards
      Marilyn

  2. Lukey says:

    All this is so easily solved – you jus introduce a mandatory binding pre-nup as part of the marriage process. The fees for lawyers to do this shouldn’t be high in the vast majority of cases – it will only cost more when the assets involved are large.
    If a couple cannot agree on this then it is very clear that they should not be getting married in the first place !

  3. Olga says:

    Dear Marilyn,
    Me and my fiance are going to married in June this year. However, I have some concerns regarding the property that we are going to buy. I am not a UK resident for now and I will come to the UK, probably, in the beginning of June. My fiance is leaving in his parents house for now and we want to buy our own house before the marriage, for example, the end of May – the beginning of June, as we don’t want to rent and we don’t want to live with his parents. As I won’t be able to work for at least 6-8 month after marriage, he suggested to take a mortgage from the bank on his name but to put my name in deeds. Can you, please, advise will this property be considered as a matrimonial property and in case of divorce will it be shared? As well, what type of ownership would you recommend in this case? Thank you in advance!

  4. Michael Rosier says:

    Can my wife claim part of my inheritance received 18 months after we separated. The family home has been sold and divided equally?

  5. Phoebe Turner says:

    Michael:
    Marilyn has asked me to reply to your question. I am a solicitor at Stowe Family Law’s London office.
    If you are not legally divorced your wife may argue that this inheritance should be put in the marital “pot” for division, even if the family home has already been sold and the equity divided equally. You can argue that this inheritance should be ring-fenced and kept out of the pot. Your argument will be bolstered by the fact the inheritance was received after separation but if there are insufficient assets in the pot to meet your capital needs, and those of your wife without taking into account the inheritance, the Court’s could allow part, or all of your inheritance to be included in the pot for division.
    Both you and your wife will need to disclose all your assets (including the inheritance); and your respective incomes and capital needs. Only once this information has been disclosed will it be possible to evaluate whether your wife has a claim against your inheritance.
    It is very difficult to advise you as to whether any such claim by your wife would be successful without knowing all the circumstances of your case so I would advise you to seek legal advice.
    With best wishes,
    Phoebe

  6. karen roberts says:

    ,I found this interesting as I had my house before marriage and my husband had land in Australia. He sold his land and moved back to Australia. I followed him 2 years later. He bought a house in Australia which is in his name. Within 6 weeks he was asking me to sell my house and was verbally abusive when I refused.. It turns out that he had debts, was a gambler and an abusive drunk. My jewellery is missing, and I was thrown out of my house in Australia. Ive been told he has no claim to my house in the uk but would anybody know if I have been given the correct information. He has rented his house out in Australia, and we are both back in the uk

    • Marilyn Stowe says:

      Dear Karen
      In English law currently the position is that all property is available for sharing but the court has discretion as to whether to share property at all and if so in what proportions.
      The factors the court will take into account are set out in Section 25 Matrimonial Causes Act 1973 and you can read more about how a court applies its discretion if you download my book for 99p from the sidebar. All proceeds to charity.
      It’s hard to advise you further here because there is much that is missing from your narrative so I hope the book helps.
      Regards
      Marilyn

  7. hayley says:

    My friend is currently going through a divorce which his wife has petitioned for, his late father ( passed away shortly before he received his divorce petition ) left him some inheritance which he has kept completely separate from the marriage and has been informed by his solicitor that it is ring fenced. So my question is … does he have to fully disclosed these assets in the e form ?

  8. Dimpy says:

    Marriage of 23 years – separated 2012 – 3 children all over 18.
    Nisi in late 2013 – husband stalling on finances
    I am Petitioner. Matrimonial home in H’s sole name with a Notice of Occupation in my name.
    My father died suddenly and unexpectedly in 2/14 once D/N had been granted – will my inheritance (including house) be ringfenced or will it have to be put in the pot for division?
    Can I still ask for 50:50 including pensions?
    Many thanks.

    • Marilyn Stowe says:

      Dear Dimpy
      In law all assets are available for sharing but the court will ring fence non matrimonial assets if needs can be met without resort to them. I doubt your inheritance will be shared but it will be taken into account in assessing your reasonable needs. I dont know any more about your financial positions.
      Ask your solicitor for advice.
      Regards
      Marilyn

  9. Smith says:

    Married over 20 yrs two children in 20’s separated in Jan 2014 nisei April 2014,.Is my inheritance received in May 2014 ring fenced ?
    His solicitor is ring fencing a fund in his name that he will give to my sons and a small inheritance received in 2003 in so doing claiming I have more assets than him then using this to offset a differential in our pensions . Can he do this ?
    I used part of my inheritance to buy him out of the marital home . The marital home is now in my name . The transactions went through our solicitors no consent order has been signed I am worried his solicitor will make a claim on the marital home and say that the lump some used to buy him out is a gift.
    Should we have a separation agreement and insist on a consultation report?
    I have lost confidence in my solicitor and need legal representation

  10. Kev Lahiff says:

    Re. ‘Non-matrimonial Assets/Property’, I have 2 questions;
    1) My wife is looking to include my collection of musical instruments as part of the division of assets. They were all acquired prior to our marriage, in 1 or 2 cases some 20-30 years prior! Am I obliged to accept this?2) I inherited my family home 7 years before my marriage. I had my wife’s name put on the deeds in order to obtain a remortgage, from which our marital home was purchased. The original property was retained and is my current home. Having conceded the marital home ‘free and clear’ of a mortgage to my wife and our children, what is the situation re. my family home? Would this constitute a ‘non-matrimonial asset’? By conceding the marital home, as well as paying monthly maintenance.have I made sufficient provision for my children/spouse?

  11. Mars says:

    I’m married to a British guy in 2013. He was divorced and have 1 daughter..
    My husband will be hiring a solicitor to transfer all his money, properties and so that he acquired in the past unto his daughter to secure her future. Also, he mentioned that whatever income we have in the present will be our common funds that we are entitled to share both for our future.
    We don’t have a pre-nuptial agreement before we got married.
    Is this moves of my husband to keep all his treasures be solely enjoyed by his daughter binding or a normal practice of the rich or within the context of UK laws?
    Please advise.
    Thank you very much.
    Mars.

  12. Corney says:

    I purchased my property 5+yrs prior to my marriage. I had one child at the time. During my on off marriage of 5yrs I had another child. My ex didnt contribute financially to the property.
    Can he still make a claim against me or would it be classed as non-matrimonial? He has only started making his claims of wanting a settlement since I have formed a new relationship. He is using it as blackmail as his contact with our daughter is restricted. His job prospects are slim to non so I will never get any maintenance either.
    Thanks

  13. Kilis says:

    Dear…,
    I am buying a flat (mainly contributed from my parents ). I am in a relationship to marry soon. We gathering documents to give notice to marry. The transaction of purchase has not completed yet. I have a daughter from my previous relationship. She is over 18, whom I want to leave a will to inherit it. Can my husband-to-be claim division of my property which was bought before our marriage? Please advise.

  14. Sarah says:

    Hi
    Myself and husband have been married for 5 years.
    We are living in his inherited property. As a family, I have 2 children from previous marriage.
    I sold my home and used the money to pay off debts and other things when moving into the new property. I do not have any other assets. If we divorce would I be entitled to a percentage of the property.
    Thank you.

  15. Parvez says:

    Dear Marilyne,
    My sister and her husband have been married for 4 years now.
    My sister did not work as she was looking after their son who is now 3 years old.
    She also gave birth to another son last year.
    Her husband saved throughout the marriage into his account and brought a 3 bedroom house last year with the intention of moving the family into it.
    The house was brought in her name as my sister does not work so couldn’t be included in the mortgage.
    He then prevented her from entering the new house using excuses like he was fixing it up however he ended up renting out the rooms and him living there too.
    My sister was forced to apply for benefits to meet her ongoing costs and to pay the rent in the one bedroom flat she was left in.
    Now her husband has threatened to divorce her and is under the impression that she has no share in the house or her children.
    If he applies for divorce, will she have recourse to claim against the house?
    I understand that he is liable for maintenance costs for the children but as the house was brought while they were together wouldn’t it be considered as property to be shared?
    Kind regards
    Parvez

  16. Parvez says:

    Sorry – Typo… the house was brought in my sister’s husband’s name only.

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