Navigating the division of assets acquired between the point of separation and the finalisation of a divorce or dissolution can be complex. This guide explores how such assets are treated legally and provides guidance on managing them during this transitional period.

Understanding the separation timeline

Separation marks the initiation of the process where a married couple or civil partners start living apart with the intention of ending the marriage or civil partnership. However, legally, the marriage or civil partnership is considered ongoing until the divorce or dissolution is finalised. This distinction is crucial as it affects the handling of assets acquired during this period.

What types of assets can be acquired after separation?

Examples of assets that might be acquired after separation include inheritances, gifts, newly purchased items, a work bonus, vested shares or assets that have appreciated in value during this period.

Courts are tasked with examining such assets to determine their classification and relevance to the financial claims arising from divorce or dissolution. They differentiate between matrimonial assets, which are generated through the joint efforts of the couple, and non-matrimonial assets, acquired independently.

The distribution of these assets takes into consideration the needs of both parties and any children involved. Where matrimonial assets adequately cover these needs, non-matrimonial assets may not need to be divided.

Siân McKernon

Siân McKernon

Solicitor | Family

023 8008 2453

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Legal status of assets acquired after separation

Assets acquired after you separate but before you are officially divorced or your civil partnership dissolved still fall into a legal grey area. The fundamental principle when dealing with the finances in the midstof divorce or dissolution proceedings is the equitable distribution of marital assets. However, assets acquired after separation may not necessarily be split equally, depending on several factors:

  • Source of funds used to acquire the asset: If the assets were purchased with money earned after separation, they might be considered separate property.
  • Intent and usage of the asset: If the asset was used for the benefit of the family or couple, it might still be considered marital property.

How courts view post-separation assets

The treatment of such assets can vary significantly between different jurisdictions. In general, courts will consider the intent behind acquiring the asset, the source of funds, and how intertwined the financial lives of the spouses or civil partners remained after separation.

Factors influencing the court’s decision

  • Duration of separation: The longer the separation period, the more likely the courts are to consider post-separation assets as separate property.
  • Financial independence: If both spouses or civil partners were financially independent and not reliant on each other’s income post-separation, assets acquired during this time are more likely to be treated as separate.
  • Mutual financial obligations: Continued financial entanglements, such as one spouse or civil partner paying for the other’s living expenses, can influence how assets are viewed.

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Protecting your assets after separation

To safeguard assets acquired after separation, it is advisable to:

  • Maintain detailed financial records: Keeping precise records of financial transactions after separation can help demonstrate the independence of these assets from the marital estate.
  • Use separate accounts: Using funds from separate, individual accounts for any purchases after separation can help in establishing these assets as separate property.
  • Formalise separation agreements: Legally documenting the terms of separation, including financial arrangements, can provide clarity and protection for assets acquired during this period.

Considerations for specific types of assets

Inheritance

In the context of divorce or dissolution, inherited assets typically retain their status as separate property, a classification meant to distinguish them from assets accumulated jointly over the course of the marriage or civil partnership. However, the specific circumstances surrounding the acquisition and subsequent handling of these inherited assets play a pivotal role in determining their final designation.

The precise timing of when an inheritance is received is critically important. Inheritances acquired before the marriage or civil partnership are almost always regarded as separate property, unless those assets have been actively commingled with marital assets, such as by being deposited into a joint bank account or used to fund joint marital expenditures like home improvements.

The management of inherited assets during the marriage or civil partnership also impacts their treatment in divorce or dissolution proceedings. For instance, if inheritance money is used to purchase a property that is then placed in both of the couple’s names, this could potentially transform it from separate to marital property, subject to division upon divorce or dissolution.

Moreover, how these assets are maintained, whether kept strictly separate or integrated into the couple’s joint financial activities, can significantly affect their classification. Clear, consistent documentation and management of inherited assets as separate from the couple’s joint finances is crucial in retaining their status as non-matrimonial property.

Understanding these nuances is essential for properly navigating the implications of inheritance in divorce or dissolution, ensuring that individuals can make informed decisions about their financial futures post-separation.

Real estate

Purchasing property after separation but before divorce or dissolution is particularly tricky. The classification of this property as marital or separate depends heavily on the specifics of how and why the property was acquired, together with the overall financial landscape of the couple.

Investments

Investments made during this period require careful consideration. The timing of the investment and the source of the investment funds will play critical roles in determining its status.

Assets acquired after separation but before divorce or dissolution represent a complex aspect of family law that requires careful navigation. Consulting with a family law specialist at Moore Barlow can provide you with tailored advice and ensure that your financial interests are adequately protected during the divorce or dissolution process.

Whether through formal separation agreements or strategic financial management, taking proactive steps to clarify the status of post-separation assets can prevent future legal complications and help secure a fair outcome in divorce or dissolution proceedings.

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We understand that family law matters can be stressful and emotional, which is why we strive to provide compassionate and practical solutions tailored to your individual needs. Our team is committed to achieving the best possible outcome for you and your family.

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