What's mine is mine and what's yours is ours?

by Andy Osborne on

When people divorce, the biggest animosity often surrounds the division of the assets. Following many landmark cases over the years, the court is required to consider the needs of the couple, sharing and compensation alongside issues of fairness and “the yardship of equality”.

The situation is complicated when the court is called upon to look at more unusual assets such as inherited assets. Is it arguable that these assets were not built up during the marriage and ought not to be divided. The court has to look to the guidelines provided by statute and case law but in doing so the source of the assets is relevant. If the couples needs can be met without recourse to the inherited wealth and the sharing principle can be departed from for good reason the wealth may be ring fenced and not taken into account.

In one particular reported case the wife’s inheritance was viewed as being relevant. She had acquired shares many years before her marriage and they had grown in value but not as a result of active management. The couple lived in a very modest manner and the husband’s needs had been met. In this case the inherited money did not need to be accessed to provide for the husband and was therefore not taken into account.

So how many couples are lucky enough to have inherited wealth? I suspect they are in the minority but how many of us live in hope of winning the lottery? If your spouse wins the lottery you would be forgiven for thinking that you would be entitled to a share of it. However, is that what would happen in reality?

It seems that following the ruling of Mr Justice Mostyn this week, lottery winnings are not a matrimonial asset. If the husband or wife banks their winnings they could leave the marriage with their winnings in tact. However, this would not be the case if the couple bought the ticket on the understanding that any winnings would be shared equally. If the winner invests the money by perhaps buying a family home then it would become a matrimonial asset and be available for sharing.

So has Mr Justice Mostyn created more chaos? He seems to be following the recent approach taken in inherited wealth cases. It is interesting that the lady in this case bought the ticket with income derived from the marriage and yet she was not expected to share her good fortune. So should we all be advising clients to keep their money separate from their spouse?

By family law solicitor, Gillian Davies

 


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