january 2024

Interview with…lois rogers

Starting the year strong, we interview Lois Rogers, Partner at Ribet Myles, to offer her advice on what can be a rather thorny area: matrimonial vs non-matrimonial assets.

I have read some articles online about different types of assets in matrimonial proceedings. What is meant by "matrimonial" and "non-matrimonial" assets?

Lois: Matrimonial assets are those which are built up or earned during the marriage/civil partnership. They are considered to be the parties’ joint endeavour and so the starting point is that they will be divided equally in the event of a divorce/dissolution, regardless of in whose name they are held. There is no discrimination between the parties’ contributions during the partnership, and it does not matter if one party has gone out to work, while the other has remained at home. The court is not interested in arguments about who did what during the relationship, except in very rare circumstances.

Non-matrimonial assets are those which are not referrable to the partnership, acquired by one party from a wholly external source, such as an inheritance or a gift, or those assets which have been brought into the marriage by one party, such as a property, or generated by one party post-separation.

This may sound like a straight-forward categorisation of assets, but this can be just the start of the analysis. Very often the factual circumstances of a case make it potentially arguable either way, and the status of an asset can be hotly disputed because the court will generally look to ring-fence non-matrimonial assets from division between the parties (subject to meeting the parties' financial needs from the other resources).

I have recently inherited some money from my parents – I understand that this can be ring-fenced from the matrimonial pot for division. How can I ensure that it remains so?

Lois: It is not uncommon for a party receiving an inheritance to want to ring-fence those assets in the event of a future divorce/dissolution. Sometimes the parents of one party wish to make a gift to their child, but have the same concerns to protect those assets in those circumstances.

The best way to try to protect an inheritance is to enter into a pre or post nuptial agreement (depending on your marital status at the time), which records your mutual intention that the inherited assets will be retained by the recipient party and will not be available for division. Whilst nuptial agreements are not binding in every case, the court will look to uphold an agreement which is freely entered into by each party with a full understanding of its implications, unless it is unfair to do so.

From a practical perspective (and because it is not always possible to enter into a nuptial agreement), retaining the inherited wealth in a separate account, in your sole name, and avoiding mingling it with matrimonial assets, will support any future argument that they are non-matrimonial and should remain so.

Unfortunately there is no absolute guarantee that an inheritance can be protected in all circumstances, but if the other party’s needs can be met from the other financial resources then it is likely that they will be preserved for the person who received them.

I purchased a property before I got married that I now rent out to supplement my income. My ex-partner says that this property, which we never lived in together, should form part of the “matrimonial pot” – is this correct?

Lois: A property which was acquired prior to the marriage and has never been occupied by the parties are both helpful indicators that the property should be treated as a non-matrimonial asset. However, an analysis of all of the circumstances of the case must be undertaken. Specifically relating to the property, factors such as whether the rental income has been used to support the marital economy, how any mortgage payments have been paid (if not just covered by rental income), and whether any substantial works have been undertaken on the property and how they have been funded, will be relevant to the issue. And more generally, broader factors will also be taken into account by the court, such as the parties’ respective needs and their earning capacities, and their overall financial resources, whether there are any children, the parties’ ages and length of the marriage.

There may also be circumstances where you want to give the property to your ex-partner in a settlement (despite its non-matrimonial character), for example, to support his or her income needs and to avoid paying ongoing maintenance.

This is why for most cases, legal advice on your specific circumstances should be sought at an early stage.

Shortly before we married, we purchased our current family home, the deposit for which was funded by the sale of my previous solely owned property. My ex-partner did not contribute anything by way of capital to the purchase of our current family home. Am I entitled to a larger share of the net sale proceeds as a result of my initial unmatched contribution?

Lois: Although the initial deposit funds used to acquire it were clearly non-matrimonial, the matrimonial home has a special status in family proceedings as it has been the centre of marital life and it is generally treated as a matrimonial asset regardless of when, and in whose name, it was acquired, and how it was funded. 

This does not necessarily mean that its value should be divided equally and it will depend on the specific circumstances of the case. For example, in a relationship of 15 years where the family has lived in that property for the entire duration, it is more likely that the value of the family home will be divided equally. In a short, childless marriage of, say, 3 years, the division of its value may be unequal to reflect the non-matrimonial contribution by one party. However, in some cases and notwithstanding the initial financial contribution by one party, its value may be divided unequally in favour of the other party in order to meet their needs.

When I proposed to my ex-partner her engagement ring was a generational heirloom (passed down by my great grandmother). I want to ensure that the ring is kept within the family so that the tradition can be continued, and passed down to one of our children and so on. Is it possible to specify / include this in any final financial settlement? 

Lois: An engagement ring is presumed to be an absolute gift made to the recipient, unless it was given on condition of its return in specific circumstances, for example, if the marriage doesn’t ultimately proceed or if it ever breaks down. The best way to procure its return in those circumstances would be to enter into a prenuptial agreement in which both parties confirm their understanding of the position. In this case, it seems that the engagement ring was gifted and will therefore be retained by the ex-partner. It is possible to include a term in a financial settlement confirming the intention to pass it on to the next generation, assuming you both agree to this, but in practice it would be difficult to enforce this against your ex-partner if they changed their mind.