The matrimonial melting pot
Married couples have claims against each other’s income, assets and pensions. If a couple divorce, the Courts have wide-reaching powers and discretion to deal with each of these issues.
As a starting point, the courts will look at sharing matrimonial assets and income. However, as it becomes more common to marry later in life, those entering a marriage are more likely to have successful businesses, savings or properties at the time they wed. If the couple does not protect those interests properly by way of a pre-nuptial agreement, then there is no guarantee that those pre-acquired assets are safe in a divorce. Other non-matrimonial assets can include income or cash that accrues after a couple separate or inherited assets.
When considering a matrimonial financial settlement, there are various factors to consider. One of these is the contribution that each spouse has made to the marriage. This can include the ringfencing of an asset that each spouse may have built up before the relationship. However, it is also important to consider how long the parties have been married, each of their financial needs and resources, together with the needs of any children. When these issues are balanced against the wealth one spouse bring to a marriage, it becomes far more difficult to clearly define the extent of the pre-acquired assets to be ring-fenced. Indeed, in a divorce, the family home will usually be considered a shared property, regardless of how it is owned and who pays the mortgage.
In the recent case in the Court of Appeal of Hart v Hart, the Court could not easily define what assets Mr Hart had built before the marriage through various successful businesses. Whilst Mr and Mrs Hart had been married for around 25 years by the time Court proceedings were issued, the Court did not think it appropriate to share the assets equally. Whilst Mr Hart has ultimately been successful in ring-fencing around £3.85 million, the Courts will continue to take a very discretionary approach in relation to non-matrimonial property. There is no set formula for distinguishing matrimonial and non-matrimonial property and it is clear that the Court continues to view the calculations as an art and not a science.
Whilst one spouse may assert that they have made significant financial contributions to a marriage, the UK courts hold a homemaker in similar esteem. This will be particularly relevant where there is a long marriage where the couple have children. Whilst Mr Hart may well consider that he has retained wealth accrued before he married his wife, this is by no means a set precedent for the future. Each case will be determined on its own facts. To avoid the complexities of the matrimonial melting pot it is wise to enter into a pre-nuptial agreement that will clearly set out how matrimonial finances should be treated.
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