Rural Estates Newsletter Spring 2021 - Flipbook - Page 20
8 – Divorce and the dynastic estate
Many spouses facing divorce are particularly concerned with how
the family court will treat assets which have been gifted or inherited.
This concern is most pronounced for the landed estate owner. In
the absence of a pre-nuptial agreement, the position in law is not
straightforward.
Flora Harragin
The family court’s approach
The family court has complete discretion as to how assets are distributed upon divorce.
It can redistribute or order the sale of assets as it sees fit to achieve a ‘fair’ result. This
includes property which has been gifted or inherited. In many legal systems, gifted or
inherited property is automatically ‘quarantined’ from financial claims on divorce and left
with the party who holds it. It is a common misconception that this applies in England
too. In fact, the English courts’ primary concern when determining what is fair is not the
source of property, but the parties’ financial needs.
Meeting needs
The parties’ financial needs comprise their respective needs for housing and income. But
needs are not interpreted in the limited way one might expect. The parties’ ‘needs’ are
generously interpreted in the light of the standard of living enjoyed during the marriage,
the length of the marriage and the parties’ financial resources. So, in most cases
involving substantial estates, ‘needs’ means a mortgage free property and an income
stream (payable, if possible, by a single lump sum). In our case of Y and Y in 2012 the only
asset available after 26 years of marriage was a country estate, which had been in the
husband’s family for two generations and was worth £27m. The wife was awarded £8.8m
(just under one third of the total). The judge ignored the husband’s plea that an order at
that level would force a sale of the estate.
Assets can, and will if necessary, be transferred between the parties or sold in order to
meet the parties’ needs, regardless of the source of the asset.
Sharing the matrimonial wealth
The law views marriage as a partnership. If there is more than enough to meet both
parties’ needs, the court can order the matrimonial property to be shared between the
parties on divorce, on the basis that that is reasonable and fair.
What constitutes matrimonial property? Assets built up during the marriage will be
deemed to be matrimonial property and shared.
But assets brought into the marriage by one party or inherited by or gifted to one party
during the marriage will be treated differently. The court will not consider those assets
to be a fruit of the marital partnership; they are external to the marriage and will be
deemed ‘non-matrimonial’. The landed estate which has been in one party’s family for
generations is perhaps the paradigm example of non-matrimonial property (but see the
warning below). It is very unlikely that non-matrimonial property will be shared unless it is
required to meet needs.
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Rural Estates Newsletter
Spring 2021
