UK media has recently covered the news that Diane Culligan, the founder of the UK women’s national football team, the Lionesses, “has triumphed in a divorce row involving a £7 million home in north London.” (The Times).
Mr Justice MacDonald ordered that Mr and Ms Culligan should be awarded about £13.7 million each in assets, allowing for an equal division of the matrimonial assets. Ms Culligan would receive the family home, and her former husband would get the other properties and the bulk of his business interests. The couple married in 1992 and have three children.
The judge acknowledged that “on the face of it, it is difficult to see how the wife’s current needs as a single person extend to a nine-bedroom, seven-bathroom property”. However, he recognised her emotional connection to the family home, adding that “a fair distribution of the assets can be achieved without the need to sell” the property.
Usually, the former matrimonial or family home (“FMH”) is the most valuable matrimonial asset that couples have, both financially and emotionally. Deciding what will happen to the FMH is one of the more sensitive and contentious issues divorcing couples face.
Ms Culligan was fortunate in that there were surplus matrimonial assets to allow her to retain the FMH, whilst still leaving enough for her spouse to retain an appropriate share of the family assets overall. In other cases, however, deciding what happens to the FMH in a divorce can be more complex.
The Law
The FMH is considered a matrimonial asset and therefore forms part of the matrimonial pot that is up for division on a divorce. It is important to understand that both parties have a financial interest in the FMH. This is regardless of circumstances where for example, one spouse purchased the FMH prior to marriage, one spouse contributed more to its purchase, or if it is only in one spouse’s sole legal name.
The case of RM v WP [2024] EWFC 191 (B) highlights that a property owned prior to marriage can become a matrimonial asset if it is used as a family home. However, it makes clear that the FMH is not always shared equally. On divorce, the starting point is equality unless there are good reasons to depart from equality, as set out in Section 25(2) of the Matrimonial Causes Act 1973.
Therefore, the court can depart from an equal division of matrimonial property, even the FMH, where fairness requires it.
Examples Of How The FMH Could Be Dealt With On Divorce
- The FMH may be sold and the net proceeds divided between the spouses.
This is appropriate if:
- The sale proceeds (along with their mortgage raising capacities) will be sufficient to enable both spouses to purchase a new home.
- Neither spouse will be able to keep up with the mortgage payments on the FMH.
- The FMH is the only/largest capital asset of value meaning if one spouse remains in the FMH, the other will not be able to afford to rehouse.
- The FMH may be transferred to one spouse (one spouse buys out the other’s share).
This is appropriate if:
- The sale proceeds would not be sufficient to enable both spouses to rehouse.
- The FMH meets the needs of one spouse, usually the primary carer of the children.
- There are sufficient other assets in the matrimonial pot to compensate the other spouse for the loss of their interest in the FMH.
- The other spouse has a good income and mortgage raising capacity and so will be able to afford to purchase a new home.
- A Mesher Order could be ordered, which would postpone the sale of the FMH, allowing the occupying spouse, usually the primary carer, to remain there. The other spouse would then have to wait to realise their interest in the property. The sale of the FMH is postponed until a specified trigger event, such as the youngest child turning 18, after which the house is sold, and the proceeds are divided.
This is appropriate if:
- The spouses agree/the court determines that it would be best for the primary carer to remain in the FMH with the children.
- There are sufficient other assets in the matrimonial pot to compensate the other spouse and to enable them to rehouse now.
- The primary carer and children would need a home of a similar size/value if the FMH is sold, but it would be inequitable to order an outright transfer to the primary carer because the FMH is the only major asset of the marriage.
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How the Family Home is Treated in a Divorce | Seddons Solicitors