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Couples in England-Wales-Scotland
1 - Which law applies?
1.1. Which law is applicable to a couple´s property? Which criteria/rules are used to determine the applicable law? Which international conventions have to be respected with regard to certain countries?
In the case of movable property, the applicable law, in the absence of a choice by the spouses, is the law of the matrimonial domicile. If husband and wife are domiciled in the same country, that country is the matrimonial domicile; if they do not share the same domicile, the applicable law would be determined on the basis of “closest connection”. In the case of immovable property, the position is less clear as there are conflicting authorities as to whether the applicable law is that of matrimonial domicile or the lex situs (place where the immovable property is situated). In any event, the courts of England and Wales will usually apply the lex fori (i.e. the domestic law of England and Wales) in matters concerning divorce and its financial consequences if they have jurisdiction. See also 9. below on forum non conveniens.
The applicable law, in the absence of a choice by the spouses, is the law of the place where the property is situated (the lex situs) in relation to immovable property and the law of the spouses' domicile in the case of movable property. If the spouses are domiciled in different countries and the question relating to their movable property arises in Scotland then the law of Scotland applies (the lex fori) (section 39 Family Law (Scotland) Act 2006).
1.2. Do the spouses have the option of choosing the applicable law? If so, by which principles is this choice governed (e.g. the laws to be chosen, formal requirements, retro-activity)?
As far as concerns the distribution of property in divorce proceedings, the answer is no. The seminal case of Radmacher v. Granatino  UKSC 42 confirmed that the lex fori (the domestic law of England and Wales) is to be applied in any event. That said, the validity of the agreement and the outcome under the chosen law are factors to be considered under the overarching principle of fairness (see 2.1. and 2.2. below).
The spouses can choose the applicable law. There are no restrictions or formal requirements (section 39(6)(b) Family Law (Scotland) Act 2006).
2 - Is there a statutory matrimonial property regime and if so, what does it provide?
2.1. Please describe the general principles: Which goods are part of community property? Which goods are part of the separate estates of the spouses?
In principle, under the law of England and Wales marriage has no effect on the property of the spouses; there is no community of property. However, upon divorce the courts are given discretion to make a wide range of financial orders (often referred to as 'ancillary relief') including adjustment of ownership of assets, for example the matrimonial home (see answer to 5.1.), depending inter alia on the length and circumstances of the marriage, relative contributions by the parties and number of children (if any).
Scotland has a modified separate property system. The general rule is that marriage does not affect the ownership of property (section 24 Family Law (Scotland) Act 1985). However, this is modified in important ways:
- A spouse has statutory occupancy rights in the matrimonial home, even if it is owned solely by the other spouse.
- There is a principle of fair sharing (which normally means equal sharing) of matrimonial property on divorce.
- A surviving spouse has certain protected rights on the death of the other and, on testacy, will often take the whole estate.
2.2. Are there legal assumptions concerning the attribution of property?
Marriage as such does not have a proprietary effect. See also 5.1. below.
There is a presumption that household goods acquired in prospect of the marriage or during the marriage are owned in equal shares, even if they were bought by one spouse (section 25 Family Law (Scotland) Act 1985).
2.3. Should the spouses establish an inventory of assets? If so, when and how?
There is no legal duty to do so. But since the source of the assets at the time of divorce can have an impact on the financial orders made by the court, it is to be recommended that the spouses do establish such an inventory (and update it when necessary). See also 3.1. and 3.2. below.
There is no provision that makes it obligatory to establish an inventory of assets.
2.4. Who is in charge of the administration of the property? Who is entitled to dispose of the property? May one spouse dispose of/administer the property alone or is the consent of the other spouse necessary (e.g. in cases of disposal of the spouses’ home)? What effect does the missing consent have on the validity of a legal transaction and on opposability towards a third party?
As indicated above, marriage has no effect on property ownership, and the answer to this question depends on whether or not the spouses choose to acquire the matrimonial home jointly. Section 37 of the Law of Property Act 1925 states that 'husband and wife shall, for all purposes of acquisition of any interest in property (…) be treated as two persons', so the general law of property applies.
It is important to note that the law of England and Wales distinguishes between legal ownership (the nominal holder of the title) and equitable/beneficial ownership. Trust law allows for the acquisition of a beneficial interest even if the other spouse is the legal owner. The spouse who does not own the matrimonial home can apply to register his or her interest at the Land Registry. Generally, it is the legal owner who has the right to administer the assets, but if the spouse (or another person) has a beneficial interest in the asset, that right might be restricted. A court can reverse a sale unless it has been made to an innocent third party who purchases at market value.
The starting point is that each spouse administers his/her own property but, under the normal rules on agency, either can authorise the other to do this. Each spouse is entitled to dispose of his/her own property. However, the effect of the statutory occupancy rights in the matrimonial home is that the spouse who owns the home cannot dispose of it without the consent of the other. Without such consent the occupancy rights are opposable against the purchaser (Matrimonial Homes (Family Protection) (Scotland) Act 1981).
2.5. Are any legal transactions made by one spouse also binding on the other?
Not usually (save in the case of fraud) as the general laws of contract etc. would normally apply.
There are no special rules for spouses. The ordinary law on agency applies.
2.6. Who is liable for debts incurred during the marriage? Which property may be used by creditors to satisfy their claims?
In principle, each spouse is liable for his/her debt unless special circumstances apply (but see 2.4. above). Only the property of the spouse who has incurred the debt can be used to satisfy a creditor's claim.
Each spouse is liable for his/her own debts. The creditors of each spouse can use only that spouse's property to satisfy their claims. However, there are special protections for the matrimonial home in the bankruptcy legislation (see sections 40 and 41 Bankruptcy (Scotland) Act 1985).
3 - How can the spouses arrange their property regime?
3.1. Which provisions can be modified by a contract and which cannot? Which matrimonial property regimes may be chosen?
The spouses can always apply for a financial order, even when a marital agreement is in place.
That said, a fair agreement between the spouses regarding the distribution of their property in case of divorce can nevertheless be of significant importance and certainly is an important factor to be taken into account by the court when exercising its discretion. The Supreme Court has indicated that an agreement is not fair if it prejudices the welfare of any of the children involved and that contracting out of the 'sharing strand' of fairness is more likely to be fair than contracting out of the 'strands' of needs and compensation (see under 5.1.).
The spouses have freedom to arrange their property as they wish. There are no ready-made legal matrimonial property regimes into which the spouses can opt.
3.2. What are the formal requirements and who should I contact?
While there are no formal requirements for a marriage contract as such, it is nevertheless recommended most strongly that the spouses receive independent legal advice and that the assets are disclosed in full, and that this is recorded in the agreement; where that is not the case (or not possible), a waiver should be recorded accordingly. The law in England and Wales surrounding pre-nuptial agreements remains undeveloped and unclear and specialist advice should always be sought.
There are no formal requirements other than the normal formal requirements for the type of transaction in question.
3.3. When may the contract be concluded and when does it come into effect?
A marital agreement can be concluded and modified before and during the marriage (and even after the marriage). Its effect of course depends on the circumstances, but very often the terms agreed will only be effective in case of divorce (as England and Wales do not have a matrimonial property regime, see 2.1. and 2.2. above).
It is quite common for spouses to conclude agreements regarding their property etc. at the point in time when they have decided to divorce (so-called separation agreements); these can then be embodied in court orders (so-called consent orders).
The couple can arrange their assets as between themselves at any time. They can choose when the arrangement comes into effect.
3.4. May an existing contract be modified by the spouses? If so, under what conditions?
Yes. See answer to 3.3.
The spouses can re-arrange their assets as they wish at any time. However, if the spouses have given away assets and placed them beyond their control (e.g. by putting them in a marriage contract trust or family trust) then, of course, they cannot then re-arrange them.
4 - Can or must the matrimonial property regime be registered?
It is not possible to register a marital agreement with any public authority. However, marital agreements executed in notarial form will be preserved in the notary’s protocol.
No. There are no special registers for matrimonial property.
5 - What are the consequences of divorce/separation?
5.1. How is the property (rights in rem) divided?
Upon divorce the courts are given a very wide discretion to make a wide range of financial orders (often referred to as 'ancillary relief'), including a reallocation or even sale of property, putting assets on trust, lump sum payments, periodical payments, orders regarding pensions etc. (sections 21 ff of the Matrimonial Causes Act 1973). The statute in section 25 lists 'matters to which court is to have regard in deciding how to exercise its powers', and among those first consideration is to be given to the welfare of the children of the family. The ultimate aim of these orders is to achieve a fair outcome. In the case of Miller v. Miller; McFarlane v. McFarlane  UKHL 24 the House of Lords identified three 'strands' of fairness, namely needs (of the parties and their children), compensation (of relationship-generated disadvantages) and sharing (of assets). Since in many, if not most, cases the needs exceed the assets, needs will often be the determining factor and therefore in many cases the other 'strands' of fairness do not play an important role, or indeed any role at all.
That said, in the same case the lead judgments seemed to indicate that certain groups of assets (particularly pre-marital, inherited and assets received as gift, or 'non-matrimonial assets') should be treated differently from the 'fruits of joint labour' and the matrimonial home with regard to the sharing upon divorce. But it was also held that the longer the relationship lasted, the less important that distinction should be.
The spouses can agree on the division. If they cannot agree, either can claim financial provision on divorce on the basis of the principles laid down in section 9 of the Family Law (Scotland) Act 1985. One of those principles is that the net value of the "matrimonial property" as defined (i.e. the property acquired by the spouses, other than by gift or succession, during the marriage but before the date when they separated, and including any house bought with a view to marriage; section 10 Family Law (Scotland) Act 1985) is to be shared fairly between the spouses (section 9(1)(a) Family Law (Scotland) Act 1985). Fair sharing means that the net value will normally be divided equally between them but the court has power to depart from strict equality in special circumstances (see section 10(6) Family Law (Scotland) Act 1985).
5.2. Who is liable for existing debts after the divorce/separation?
See answer to 2.6.
The spouse who was liable before remains liable afterwards.
5.3. Does one spouse have a claim to an equalisation payment?
No, but see answer to 5.1.
The effect of the principle of fair sharing of the net value of matrimonial property on divorce is that one spouse may claim a payment from the other to bring about equality.
6 - What are the consequences of death?
In England and Wales there is freedom of testation and there are no reserved/mandatory portions for surviving spouses.
In case of intestacy, the spouse will inherit according to section 46 of the Administration of Estates Act 1925. The exact entitlement will depend on whether or not the deceased leaves children ('issue').
Irrespective of whether there is a will or not, the surviving spouse or a dependant can make a claim against the estate of the deceased for such financial provision as determined by the court under the Inheritance (Provision for Family and Dependants) Act 1975.
On intestacy, the surviving spouse has fixed prior rights to the house, the furniture and a sum of money (sections 8 and 9 Succession (Scotland) Act 1964).
If these rights do not exhaust the estate the surviving spouse also has a right to a third of the remaining movable property (if there are surviving issue) or a half (if there are no surviving issue). The surviving spouse will take the remainder of the intestate estate if the deceased is not survived by issue, parents or siblings (see section 2 Succession (Scotland) Act 1964).
On testacy, the surviving spouse is very often left the whole estate. In theory, the surviving issue have a right to a third of the movable property of the deceased (legitim) but the issue often renounce this right. If the will passes over the surviving spouse he or she can claim a third of the movable property, if there are surviving issue, or a half, if there are no surviving issue.
7 - Does your national law provide a special matrimonial property regime for multi-national couples?
8 - What does the law provide for the property of registered and non-registered partners?
The Marriage (Same Sex Couples) Act 2013 enables same sex couples to marry. Alternatively, same sex couples can formalize their relationship by entering into a civil partnership (see Civil Partnership Act 2004). The legal consequences are virtually identical to those of marriage (including financial relief on dissolution) and civil partnership has rightly been called 'marriage in everything but name'. Furthermore, the 2013 legislation enables couples in civil partnership to convert their civil partnership into marriage. The law of England and Wales makes no provision for civil partnership between opposite sex couples.
There is no specific regime for couples living together without having formalized their relationships (usually referred to as 'cohabitants') who will therefore have to rely on the general law, and particularly the (common intention) constructive trust (see especially Jones v. Kernott  UKSC 53). It is important to note, however, that the courts have considerable discretion to make orders with regard to the children under Schedule 1 of the Children Act 1989 (entitled 'Financial Provision for Children'), including lump sum payments and property transfers. Cohabitees should take legal advice prior to acquisition of property in order to ensure that any ownership of property is defined in accordance with their personal requirements.
The rules for registered civil partnerships between persons of the same sex are the same as for marriage (see part 3 Civil Partnership Act 2004).
For unmarried couples cohabiting as husband and wife (or unregistered partners cohabiting as civil partners) the rules applying during the relationship are the same as set out above for married couples but the rules on split-up and death are different. There is no principle of equal sharing of matrimonial property on split-up and there are no fixed survivor's prior rights or protected legal share on the partner's death. However, the cohabitant can apply to a court for a financial provision on the split-up (designed mainly to rectify any injustice caused by contributions made or disadvantages suffered in the cohabitation) and for a discretionary provision on the death of the other partner (see sections 25 to 29 Family Law (Scotland) Act 2006).
9 - Which is the competent authority to turn to in cases of disputes and other legal issues?
The single Family Court is now the national court for all family proceedings in England and Wales including divorce. This replaces the complex system of different tiers of court which previously existed. Under the new structure, Regional Divorce Centres have been established throughout England and Wales and petitions for divorce are now submitted to the appropriate Centre.
Beyond the grounds listed in the applicable EU Regulation (Brussels IIa), the common law grounds for jurisdiction are rather wide; essentially jurisdiction can be established if one of the spouses is domiciled in England and Wales. However, the doctrine of forum non conveniens allows a court to stay proceedings/refuse jurisdiction if it thinks that a court in another jurisdiction is better placed to deal with the matter at hand. See also 1.1. and 1.2. above.
The ordinary civil courts (i.e. the Court of Session for the whole of Scotland and the local sheriff courts) have jurisdiction in matters relating to matrimonial property and the division of assets on divorce. The Scottish courts have jurisdiction to make an order relating to financial provision on divorce if they have jurisdiction in the divorce action (see section 10 of the Domicile and Matrimonial Proceedings Act 1973). The rules on jurisdiction in divorce are those laid down in Council Regulation (EC) No 2201/2003 of 27 November 2003.
For the local sheriff court to have jurisdiction in divorce the Scottish courts must have jurisdiction under the Council Regulation and in addition either party to the marriage must<
- (i) have been resident in the sheriffdom for a period of forty days ending with the date when the action was begun, or
- (ii) have been resident in the sheriffdom for a period of not less than forty days ending not more than forty days before that date, and have no known residence in Scotland at that date.