What is the date of separation in family financial proceedings and why does it matter?

In England and Wales, the date of separation in family law is defined as the point in time when a couple ceases to live together as a couple. It is the date that the marriage effectively breaks down. If there is a dispute, the court will hear evidence on when the relationship actually ended.

The date can be critical as it marks the dividing line between matrimonial property (shared assets accumulated during the marriage) and non-matrimonial property (assets acquired after separation). H v H (financial provision: capital allowance) [1993] confirmed that the date of physical separation usually marks the end of the marriage for financial purposes, rather than the date of divorce proceedings. However, this was then further clarified in the case of Rossi v Rossi [2006], as detailed below.

Defining separation

Key points defining separation are:

• Living apart – a couple can be legally separated while still living under the same roof. The court looks at conduct and not just whether one party has moved out.
• Lack of togetherness – as displayed by not sharing a bedroom, not cooking/eating together, cessation of shared household duties, and not attending social events together as well as keeping independent finances and telling any children about their separation.
• Mutual recognition of separation – often the date of separation is established when one spouse tells the other that the relationship is at an end and acts accordingly.

What if the date of separation is in issue?

Sometimes matters are not as clearcut as in the examples above. In those circumstances, however, the only significant date is when a couple actually physically separated. If, until then, the day-to-day reality of the couple’s marital partnership continues unchanged (for example, the couple still shares a bedroom, one spouse drops off children to and from school, supports them in their studies, purchases food and cooks meals for the whole family, just as he or she did throughout the marriage, thus enabling the other spouse to apply himself or herself to their work and to generate the family income), the court is very likely to see the couple’s conduct as not being that of a separated couple.

Another very significant factor to be considered is where children are unaware of a breakdown of a marriage. In those circumstances, the couple would have conducted themselves so as to give the appearance of normality and would have demonstrated a “mutuality of commitment” to the family unit, including holidays and events with extended family members, therefore leading the court to see them still as a couple and not separated.

Additionally, if there is only a modest adjustment in the couple’s financial arrangements during this period and otherwise there is no real material change, then again, the court is likely to look on the conduct as being that of a couple still together and not separated.

Ultimately, however, the court will look at a couple’s entire course of conduct and no one factor will be determinative.

What are the financial consequences as to the date of separation? 

The financial consequences of clarity on the date of separation are significant. In the case of Rossi, Mostyn J stated:

“If the post-separation asset is a bonus or other earned income, then it is obvious that if the payment relates to a period when the parties were cohabiting, then the earner cannot claim it to be non-matrimonial. Even if the payment relates to a period immediately following separation, I would myself say that it is too close to the marriage to justify categorisation as non-matrimonial. Moreover, I entirely agree with Coleridge J when he points out that during the period of separation, the domestic party carries on making her non-financial contribution but cannot attribute a value thereto which justifies adjustment in her favour. Although there is an element of arbitrariness here, I myself would not allow a post-separation bonus to be classed as non-matrimonial unless it related to a period which commenced at least 12 months after the separation”.

As a result, for the purposes of dividing assets, the matrimonial assets to be divided are normally those assets in existence as at 12 months after the date of separation.

Top tips

It is important, therefore, to establish a date of separation and to clarify the date of separation, as soon as possible, particularly where there is going to be potentially a dispute about matrimonial and non-matrimonial property. If one spouse is likely to be receiving income/assets that are arguably non-matrimonial, such as a bonus/deferred assets, it is advisable to make sure that those assets are put into a separate account and not ‘mingled’ so that they can be easily defined at a later date. To add them to existing matrimonial accounts /assets risks ‘muddying the waters’ and making them less easy to identify, if necessary, at a later stage.

If you have any questions or concerns about any financial consequences on divorce and separation, please contact Emma Harte or Christina Muir.