What Are Matrimonial And Non-Matrimonial Assets In Divorce?
Divorce is, arguably, the worst thing that could happen to a married couple. It is both mentally and physically straining especially if you have kids that go through the same process. But, sometimes, divorce is inevitable if both parties have tried their best and are not able to solve the differences. While applying for a divorce, you have to take care of the asset division as well. This is why one of the first things your divorce attorney will mention is matrimonial and non-matrimonial assets. These are two broad terms that define the way the assets are divided after divorce. We will discuss both in detail to help you make informed decisions just when you need them.
What Are Matrimonial Assets?
Matrimonial assets are the assets that have either been treated as joint or that were purchased during the relationship regardless of who owns it and the name/title. This might include the family house, bank accounts, and other expensive properties.
The type of asset does not matter in this case. Any asset can be a matrimonial asset if you or your spouse purchased it when you were married or living together as a couple before marriage. Moreover, assets that are used by you and your spouse and you consider it a joint asset is a matrimonial asset.
How Are Matrimonial Assets Treated In Divorce Cases?
When it comes to dividing matrimonial assets during a divorce, the prime objective is to divide the assets equally so that both parties are left with something to match their needs and preferences. In the beginning, the lawyers and the judge might argue for a 50/50 split. But the percentage can also vary depending on the stability of both parties.
For instance, the 50/50 percentage might not remain if either the husband or the wife happens to be financially stronger than the other. Then again, this is done to ensure both parties leave with a fair distribution. In other words, it could be that sometimes a fair outcome might be an equal outcome, and an unequal outcome may be a fair outcome as well.
This depends on several factors such as the financial stability of both parties, future earning capacity, and any special circumstances such as disability. You might be the owner or have contributed a bigger share to acquire an asset during your marriage or living together.
But for the court the fact who paid for the asset or paid the higher percentage for the asset doesn’t matter. If it’s a matrimonial asset, both parties can claim a share of it. A prime example of this is a home purchased before marriage and later became a joint asset as in a family home.
The owner might have paid a big amount to acquire the house but as soon as it becomes a family home, it will be treated as a matrimonial asset during a divorce. The property will be divided equally based on the factors mentioned above. It might be an equal or unequal distribution according to you but the court will ensure the distribution is fair. Fighting over getting a bigger share of assets is one of reasons some divorces take too long to conclude.
What Are Non-Matrimonial Assets?
Non-matrimonial assets are the opposite of matrimonial assets. If you purchased an asset before the marriage or purchased it from an external source, then it may be qualified as a non-matrimonial asset. For example, it could be properties that were purchased before marriage but not used as a joint asset.
Furthermore, inheritances received before or during the marriage but only if they have been kept separate along with family gifts and other separate businesses. This is why you should consult a family attorney Fairfax VA in any case whether you’re dealing with divorce right now or not. This will help you take correct steps that can make a huge difference if you ever have to go through a divorce.
How Are Non-Matrimonial Assets Treated In Divorce Cases?
Non-matrimonial assets are treated differently from matrimonial assets as they are separate entities and you do not need to share them with your spouse. This means the parties have a weaker claim to non-matrimonial assets in a divorce. However, there are two exceptions to this rule.
First Exception
Non-matrimonial assets can only be divided or shared if the matrimonial assets are not enough to meet each party’s reasonable needs. The reason is that courts have various ways to ensure both parties leave with something that helps them live a stable life.
Although the courts will not include or discuss much about the non-matrimonial assets, but only if matrimonial assets are deemed insufficient for meeting reasonable needs.
Plus, both parties must not hide assets thinking the court does not need to know. The court can easily find out and distribute non-matrimonial assets if needed. For instance, if an investment property was purchased before marriage and not used as a family home, it will not need to be distributed as long as other matrimonial assets are deemed sufficient for meeting the needs.
Second Exception
The second exception is if the assets become co-mingled. Sometimes, it could be complicated to determine which exactly are matrimonial and non-matrimonial assets. If the assets have mingled, then it might be impossible to unravel them for financial settlement.
If non-matrimonial assets are mixed with matrimonial assets that are jointly shared or used, they will be subject to division. Due to such complications, you should consult a lawyer who will work on determining what can be considered matrimonial or non-matrimonial.
Ring-Fencing Non-Matrimonial Assets
When the couple is already in divorce, it could become difficult to protect assets. Non-matrimonial assets can be ring-fenced if it is planned. This is why having a post-nuptial or pre-nuptial agreement is important as it helps clarify the ownership of the assets.
For example, you can specify that the value of any business holding is a non-matrimonial asset and will remain with the owner in case of a divorce. Although the court is not legally bound, it will give appropriate weight to a nuptial agreement if both parties have already agreed to the conditions and the agreement is fair.
Another way of ring-fencing non-matrimonial assets is by creating trust in them. This prevents the assets from being shared. Technically, a third party has access to these assets on behalf of the owner and the spouse cannot easily get to them if a divorce was to take place.
Finally, the best way to ring-fence non-matrimonial assets is by keeping them entirely separate from the matrimonial assets. Plus, you should avoid doing anything that might mix up the funds. For example, if you inherit some money during the marriage, you should keep it in an entirely separate bank account titled in your name.
Conclusion
Keep in mind that it could both be easy and difficult to determine which asset is matrimonial and which isn’t based on several factors especially if the assets are all mixed up. The court evaluates the situations completely and independent determines the assets on a case-by-case basis. This is why you need to plan these things before setting up or getting married. And, try to hire a divorce lawyer Fairfax VA as soon as you feel divorce is the ultimate result as it makes it a lot easier for them to differentiate the assets and argue for them in court.