I brought assets into my marriage – can I keep them on divorce?

Divorce is often a complex and emotionally charged process, especially when it comes to the division of assets post-separation. A common question we are asked by clients is how an asset that one party brought into the marriage will be treated, and whether it can be protected (or “ring-fenced”) when resources are shared on divorce. 

Unsurprisingly, there is no one-size-fits-all answer and each case will turn on its own merits. In this article, we explore what the law says and how the court typically addresses this issue.  

Matrimonial or Non-Matrimonial? 

When judges review financial provision in divorce cases, they have a broad discretion as to what is deemed fair. Even for couples who choose not to engage in a contested court timetable, perhaps opting instead for a voluntary process such as mediation or solicitor-led negotiations, it is important they have an understanding of how the court is likely to apply its broad discretion because this may help to inform the parameters of a fair settlement and in turn their approach to the negotiation exercise. 

All assets will be considered by a court regardless of when they were acquired. This is because under section 25 of the Matrimonial Causes Act 1973, the court has a statutory duty to consider: “the income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future…”. Both parties should therefore take care to disclose all of their financial interests, even if they are of the view that a particular asset should be ring-fenced or excluded from the sharing exercise. Otherwise, they risk any settlement being set aside on the basis of non-disclosure. 

A secondary question for the court may then be whether any of those financial resources can be regarded as “non-matrimonial” in nature, and in turn whether it is appropriate for them to be ring-fenced. 

The answer to this depends on the circumstances of the case and the wider resources that are available to the parties. One of the court’s primary concerns will be ensuring that both parties needs can, as far as possible, be met. Where children are involved (typically under the age of 18), their needs will be the court’s first consideration.  

So, what are needs? 

At a basic level, meeting needs means ensuring that both parties can be appropriately re-housed. However, the 2023 guidance issued by the Family Justice Council makes clear that needs are generously interpreted and will in part be measured by assessing the standard of living during the marriage, and allowing both parties to maintain that standard as far as possible. For that reason, in the majority of cases all of the resources held by parties within a marriage will typically be considered for distribution, which can include resources one spouse may consider to be “non-matrimonial”, regardless of when they were acquired or by whom. 

A court will also consider the length of the marriage and the extent to which any of the parties’ needs have been generated by their relationship. Consider here the example of a long marriage creating a level of financial interdependence, or the existence of children which may have required one party, usually the wife, to take a career break. In this example it is likely that the court will have recourse to all, or most of, the financial resources available to ensure an overall fair result.  

It is worth noting that in some instances a non-matrimonial asset may be used to purchase an asset during the marriage, such as the family home, which then becomes matrimonial in nature. In these cases, this is due to the concept of “inter-mingling”. 

If however the financial resources accrued during the marriage are sufficient to meet both party’s needs, which usually only applies in very high net worth cases, then the court may be persuaded that it is appropriate to exclude non-matrimonial assets from the sharing exercise. Nonetheless, consideration should still be given to the extent any resources were “mingled” within matrimonial life, the duration of the marriage, and ensuring an overall fair result. As a general rule of thumb, the longer the marriage, the less likely the court will be to consider the source of the asset as a determining factor. 

How can I protect my position? 

Parties to a divorce should take care to receive specialist legal advice to ensure that they understand their rights in respect of non-matrimonial property. 

For those contemplating marriage and who wish to consider pre-emptive steps to protect their assets, the preparation of a nuptial agreement can be a very effective tool to ensure that separate or non-matrimonial property can be ring-fenced in the event of future relationship breakdown. 

If you would like to speak to a specialist about dealing with your financial settlement on divorce, please get in touch.