How To Protect Your Money & Assets In Divorce

What are matrimonial and non-matrimonial assets?

Everything you and your spouse own, whether jointly or separately, will need to be disclosed and considered during a divorce. This is known as financial disclosure and typically includes:

• Property
• Savings and investments
• Pensions
• Businesses
• Inheritance
• Debts

Courts don’t just look at what’s in your joint names. Sole ownership doesn’t offer automatic protection. Even assets held overseas, in trusts, or in one person’s name can still be brought into the overall pot that needs to be divided.

So, how do you know what might be shared and what could be protected?

The law draws a line between matrimonial assets and non-matrimonial assets:

• Matrimonial assets are those built up during the marriage. This includes the family home (even if only one person paid for it), savings, pensions, and jointly run businesses.
• Non-matrimonial assets typically include things like inheritance, gifts from family, or property you owned before the marriage.

But that’s not the full picture. Non-matrimonial assets can still be split —for example, using inherited funds to pay off the mortgage or investing pre-marital savings into a shared home. Once that happens, they may lose their protected status.

The court’s primary objective is to meet the financial needs of both parties, particularly where children are involved. That may include making provision from non-matrimonial assets where necessary.

This is where timing and documentation make all the difference. Keep records, keep assets separate, and seek advice early. That’s how we help clients protect what’s theirs before emotions and entitlements start clouding the waters.

How divorce courts divide assets in the UK

Family courts follow the guidance set out in Section 25 of the Matrimonial Causes Act 1973, which gives judges broad discretion to decide what is fair based on each couple’s unique situation.

Judges consider several factors:

• Each person’s financial needs
• Income and future earning capacity
• Contributions to the marriage
• Standard of living
• Age, health, and the length of the marriage
• The welfare of any children

Children’s housing and care often take priority. That may lead to one person keeping the family home or receiving a greater share of assets.

The idea of ‘fairness’ in divorce is often misunderstood. A 50/50 split isn’t guaranteed. Judges at the family court focus on needs, contributions, and what allows both people to move forward with dignity. The outcome depends on individual circumstances.

In shorter marriages with no children, courts may favour a clean break divorce, which is when each person keeps what they brought into the relationship, and all future claims are severed.

In marriages lasting 10 years or more, courts are more likely to view both spouses as having made equal contributions, financial or otherwise. That often results in an equal split or a division based on long-term needs, particularly where one person has been financially dependent.

What assets can be protected and how?

Not every asset is treated the same in a divorce. Some are easier to protect than others, but much depends on timing, documentation, and how the asset has been used during the marriage.

Assets that may be protected include:

• Inheritance received before or during the marriage
• Gifts from family members
• Property bought before the relationship
• Assets held in trust (with limits)

Courts are more likely to treat these as non-matrimonial. That protection weakens where the asset has been mixed into joint finances, for example, using an inheritance to renovate the family home.

You stand a stronger chance of protecting what’s yours by keeping assets separate, maintaining clear records, and avoiding joint ownership unless there’s legal clarity.

Trusts can offer protection in some cases, though courts may look beyond the structure if the trust is seen as a financial resource available to you.

Once assets are mingled, your position becomes harder to defend. We regularly work with clients to separate, ring-fence, or evidence non-matrimonial property before those lines become blurred.

Prenuptial and postnuptial agreements

A well-prepared prenuptial agreement is one of the most effective ways to protect assets in the event of divorce. It sets out what should happen to your property, income, and investments if the relationship ends.

These agreements are not automatically binding in England and Wales. But courts will generally uphold them when they meet key criteria:

• Both parties had independent legal advice
• There was full financial disclosure
• The agreement was signed willingly and in good time before the wedding
• The terms are fair and meet future needs

Postnuptial agreements work in the same way. The main difference is timing, as they’re signed after the marriage has begun.

People often use postnups when circumstances change during the marriage. For example, one partner might receive an inheritance or start a business and want to protect it.

These agreements can give both parties clarity and confidence. They’re especially useful in second marriages or where children from previous relationships are involved.

We offer a fixed fee prenuptial agreement for £799, which is significantly cheaper than most local solicitor firms.

How to protect assets without a prenup

While prenuptial agreements are useful, they aren’t the only option. There are still ways to protect your assets, especially when you act early and keep proper records.

Common ways to protect assets without a prenup include:

• Cohabitation agreements: These agreements can set out financial arrangements for couples who live together before marriage. These are particularly useful when buying property jointly or when only one name is on the title.
• Declarations of trust: These agreements clarify ownership shares in a property. They’re especially important where one person pays a larger deposit or covers most of the mortgage.

Loans from family members should be formally documented. Without a signed loan agreement, courts may treat the money as a gift.

In some cases, setting up a trust may offer protection. The structure and purpose of the trust must be clear, and you should expect the court to examine how and when it was established.

We advise clients on these steps when marriage is on the horizon or when couples choose not to marry but want clarity and protection.

Business protection in divorce

Business assets are treated like any other asset in a divorce. They must be disclosed, valued, and considered when reaching a financial settlement.

The court’s aim is not to dismantle a functioning business, but the value of your business interest will still form part of the overall division.

Depending on the circumstances, you might:

• Offset your business interest against other assets
• Buy out your spouse’s share
• Reach a clean break by adjusting pension or property shares

Family-run businesses are particularly sensitive. The court may consider how income from the business supports the household and whether future earnings should be shared.

Pensions, offsetting and financial needs

Pensions are often one of the most valuable assets in a divorce, yet they’re sometimes overlooked or misunderstood.

Courts can divide pensions in three ways:

• Pension sharing – a formal court order transfers a percentage of one person’s pension to the other
• Pension offsetting – one party keeps their pension in return for the other receiving more of a different asset, such as the family home
• Pension attachment – one party receives income from the other’s pension when it starts (less common)

Which method is right for you depends on your age, the type of pension, and your future income needs. Valuations are complex and require specialist advice.

Pension offsetting is often used where one person wants to keep their pension intact. When offsetting, the trade-off must be fair and meet the long-term needs of the other party.

Inheritance, overseas assets and disclosure

Inheritance is not automatically excluded from divorce proceedings. It depends on when it was received, how it was used, and whether the recipient kept it separate.

The court may treat an inheritance as non-matrimonial if it was clearly ring-fenced. However, if it’s been spent on the family home or placed in joint accounts, it may become part of the marital pot.

Assets held overseas must be disclosed. The court can make orders over foreign property, though enforcement will depend on the laws in that country.

Trusts, offshore holdings, and inherited assets all attract closer scrutiny. The more transparent you are, the stronger your position.