Divorce can be unsentimental and unflinching in its ability to force a re-examination of long-held beliefs, and none more so than those surrounding matrimonial assets. The solidarity and certainty of, ‘what’s mine is yours and what’s yours is mine,’ can suddenly seem shrouded in doubt, especially when assets are not held in shared names, or the parties have very different notions of contribution to bring to the table. Clarity on these matters can be achieved by starting from a common point; namely, when both parties look at defining matrimonial assets through the lens of divorce and more particularly, the eyes of family law.
The Question of Need
Each party has a duty to provide full and frank disclosure to the other, giving details of all their assets and all their debts, including those that they may partly own with someone else, or have a beneficial interest in, whether they are onshore or offshore, or even those acquired by one party before the marriage or any that may be seemingly ‘ringfenced’ in a specific financial instrument, a trust for example. There are no exceptions in the disclosure process and moreover, there are considerable detrimental consequences for any party who is later shown to be hiding or disposing of assets in order to defeat the other’s claim in a divorce settlement. Once full disclosure has been achieved, the first consideration will always be the needs of the children or any ‘children of the family’, namely, a child of dependant age who is financially reliant on the family, whether or not they are the biological child of both, or indeed, either party. Once the children’s requirements are determined, the needs of both parties are then assessed. Need becomes the overriding principle in the first instance for both parties and the court has a wide discretion to consider utilising any and all assets to meet those needs satisfactorily.
The Question of Fairness
When divorcing parties cannot agree on a ‘fair’ settlement between themselves, the court is called upon to reach a decision for them, giving due consideration to all the factors set out in Matrimonial Causes Act 1973 including the length of the marriage, the health, age and earning capacity of each party amongst other factors. As well as applying the consideration of need as outlined above, other key principles are drawn on to reach a fair settlement including, ‘the yardstick of equality’, whereby the breadwinner and the homemaker are equally recognised. ‘The sharing principle’ is one that need not be applied to non-matrimonial assets, i.e. those acquired outside the marriage, unless they are required to meet the needs of the parties. Matrimonial assets on the other hand are generally subject to the sharing principle. Once needs are met, non-matrimonial assets, such as a business, a pension, inherited property or another asset generated prior to the marriage, outside of the marriage, or indeed after separation, can be looked at in the context of remaining with the spouse who acquired or created it. Whilst an argument for exceptional contribution does exist as a departure from the sharing principle, it rarely succeeds as in most instances it would discriminate against the homemaker’s contribution and the fairness imposed by ‘the yardstick of equality’ principle.
When Definitions Collide
Whilst the difference between matrimonial and non-matrimonial assets are clear enough, there is less certainty afforded in the reality of how those assets are treated by the court. Case law provides both rules and exceptions, with Charman and Miller, two landmark family law cases favouring the sharing principle, and yet the lack of reported cases where the non-matrimonial property has been transferred outside of a case of need, speaks to its actual rarity. A more recent court of appeal decision in the case of Hart v Hart, applies a more nuanced view whereby, “ … the sharing principle applies with force to matrimonial property but does not apply, or applies with significantly less force, to non-matrimonial property.” It cannot be understated therefore that the court’s discretion will take into account all the factors laid out under Matrimonial Causes Act 1973 to form their view on what a fair settlement would be for both parties.
Expert Guidance
The job of any good family law solicitor is to use their years of experience to help their client understand how the court could interpret the law in reaching a fair settlement on the specific facts of their case. Early advice regarding matrimonial and non-matrimonial assets, together with all their associated tax implications, duties of disclosure and the weight that a court is likely to apply to any feature under The Matrimonial Causes Act 1973 is highly recommended. Antony Clapp Solicitors specialises in Family Law and is adept at assisting clients with their financial settlement issues. Contact our experienced team to arrange your consultation with one of our experts.