Non-Matrimonial Assets – What are they?
Divorce is not always swift and straightforward, especially dividing the assets and funds. The pot of assets for divorcing couples includes matrimonial and non-matrimonial assets.
Many people are of the view that each party walks away with a 50% share in the property and/or assets on divorce. However, that is not always the case as it is possible for one spouse to get a greater share.
Often, the court orders the division of marital assets to meet the financial needs of the spouse. However, many are unaware of how the court treats assets acquired outside of the marriage.
Non-Matrimonial Assets – What are they?
As the name suggests, non-matrimonial assets are financial assets acquired prior to marriage or after separation without the contribution of the other spouse.
Although it is difficult to determine which asset should be considered as non-matrimonial, these assets usually include gifts, inheritance, or capital earned through investments.
For assets to be considered non-matrimonial assets, such property must not have mingled during the marriage with matrimonial assets, such as transferring the property owned by one of the spouses to joint names after the marriage.
What Counts as Non-Marital Assets?
There is no clear definition for extra marital property, however, such assets must be separated from the matrimonial wealth to be identified as non-matrimonial assets.
These assets are not likely shared among the divorcing couple. However, the court may order for non-marital assets to be included in the pot to meet the needs of the ex-spouse. Non-marital assets include:
- Inheritance
- Pre-marital assets such as property or share property that have remained distinct from the marital assets
- Funds or assets received as a gift from parents, friends, or close relatives
- Asset owned by the spouse in their sole name and it is not a matrimonial home
- Post-divorce assets
What Happens to Non-Matrimonial Assets in the Event of Divorce?
Whether or not an asset is considered a non-matrimonial asset and how it is treated is highly complex and varies depending on each case. Even if the asset is identified as non-marital, that does not mean the asset would not be put in the pot when it comes to a division before a Judge.
If the matrimonial wealth is not enough to meet the needs of a spouse, the court will order non-marital assets to be included in the financial settlement. In the event of divorce, both parties have to disclose their assets including marital and non-marital property.
If the matrimonial assets are sufficient to meet the needs of each spouse, then non-matrimonial assets will be excluded from the financial settlement. However, if it is not possible, the financially vulnerable spouse will be awarded a share in the non-matrimonial property or a sum to meet their needs.
Exclusion of Non-Matrimonial Assets From the Financial Statement
It is unlikely that the non-marital asset will be divided unless to meet the needs of the ex-spouse. It is vital to draw up a pre-nup and a post-nup agreement to exclude such assets from the matrimonial assets.
