Divorce Proceedings And Post Separation Income / Asset Accrual

We have a lot of enquiries as to what happens with income and assets that have been accrued after parties have separated from their spouse but prior to Divorce. Examples could include salary, bonuses, redundancy payments, inheritance or another property.

The law states that all assets accrued during the marriage and indeed cohabitation (when the parties live together before they are married) form part of the ‘matrimonial pot’ and are capable of being shared. So what happens to post separation assets as technically you are still married although you are no longer in a relationship?

There have been a large amount of cases through the Courts that have considered this issue.

In the recent case of Hart v Hart [2017) EWCA Civ 1306, Lord Justice Moylan set out a three-stage approach to this question;

1. The court must determine whether there is non- matrimonial property. It is open to the court to find there is not non-matrimonial property in view of its materiality and / or relevance.
2. If there is a “clear dividing line” between non-matrimonial property and matrimonial property then the court can apply that distinction i.e. clearly separate the assets accrued in the marriage and the assets accrued after separation. However if this is not possible the court should undertake a broad evidential assessment and leave questions of division until stage 3 (below).
3. The court must then undertake an overall assessment of fairness with reference to the section 25 factors of the Matrimonial Causes Act 1925.

It seems that if the accruals are deemed non – matrimonial and can be clearly shown that they are post separation and not relevant to the marriage that they then should not be subject to being shared with your spouse.

However, in a more recent case of C v C [2018] Roberts J stated that point 3 (above) is likely to be limited to considerations of need and compensation (as per the s25 factors).

In simple terms therefore the approach can be set out as follows:

1. The Court will look at whether they can determine what assets have been accrued post separation and have not been mingled with matrimonial assets (i.e. assets obtained after the parties have separated).
2. If the Court can distinguish this then the Court can draw a line to separate the assets accordingly and exclude them from the ‘matrimonial pot’. However, if it cannot be distinguished (i.e. the lines are blurred for example in a business venture that was started before the marriage which the other spouse supported) then the Court will look at the facts of each case and the assets overall to determine what will be a fair division.
3. However, the Courts will consider need as the paramount concern i.e. whether one party has a higher need than the other for a larger share of the assets (for example due to a large difference in income, earning capacity, housing requirements etc) OR whether someone should be compensated (i.e. for a loss of pension rights due to the separation as you were relying on your spouse’s pension to support you when you reached retirement age, or you gave up your career to support your spouse’s business or to care for the children etc). Therefore, if it is found that the spouse who has not accrued the post separation assets has a need or is entitled to compensation, then the post separation accrual will not be excluded and the assets will remain in the matrimonial pot for sharing.

The law surrounding financial division of assets can be difficult and complex to understand. Therefore, our team of specialist family solicitors are on hand to assist you. We offer 30 minutes free initial advice appointments and also offer payment plans.

Please do not hesitate to contact our family solicitors Gillian Lavelle or Kim Busby if you wish to discuss any of the above further.