What happens to the Matrimonial Home on Divorce?
The most valuable asset couples acquire during their marriage tends to be the matrimonial home. Accordingly, the first question divorcing clients ask will often be, "Who gets the house?".
On divorce, the net value of the matrimonial property at the date of separation is divided between the spouses. The matrimonial home can be sold and the proceeds split between the parties or transferred to the sole name of one of them. The task for the family lawyer is therefore to ascertain whether the house in question is matrimonial property.
What is matrimonial property?
Matrimonial property is all the property acquired by the spouses or either of them from the date of marriage until the date of separation except for third party gifts and inheritance. The exception to this is the matrimonial home. Any heritage bought in contemplation of marriage for use as a family home is matrimonial property despite being purchased pre-marriage. Thus if one party buys a house before marriage, this does not become matrimonial property by virtue of the other party moving in post-marriage. If however the house was bought to serve as a family home for the purchaser and her future husband, it is matrimonial property. It is irrelevant whether it is in sole or joint names.
How is matrimonial property divided?
Matrimonial property is shared "fairly" between divorcing parties. In theory, this means equal sharing, however it is not always that simple. The Courts will deviate from equal sharing if fairness so demands.
One circumstance which may justify unequal sharing of property other than the matrimonial home is that the purchase funds were not derived from the income or efforts of the parties during the marriage. For example, the funds may have come from sale of pre-marriage property or donation by a parent. In relation to the matrimonial home, however, it is consistently held that the source of funds is less important because these funds were clearly devoted to matrimonial purposes.
The use to which the property is put may also justify unequal sharing. If it is used as a family home for children of the marriage then preservation of the home for this purpose may justify deviation from equal sharing and a transfer made to the sole name of the children's primary carer, even if this results in that the other party receiving less than half of the total fund of property. Equally, where the house cannot reasonably be sold because it is tied up with a business, this may justify a property transfer order and a potentially unequal split.
The Courts will also consider whether any agreement has been entered by the parties regulating the division of property on divorce. Prenuptial agreements, while they can be disregarded if unfair or unreasonable at the time they were entered into, are generally followed in deciding the property split. It is therefore worth considering when purchasing a family home whether you wish to enter a formal agreement regulating the fate of this property in the event of breakdown of the marriage, particularly if the purchase has been facilitated by pre-marital or third party funds, as the Courts will be reluctant to recognise this contribution if left to their own devices.
This article was written by Catherine Karlin of Anderson Strathern.
It is used with permission.
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