When a relationship breaks up, the matrimonial property may need
to be divided between the parties. The court will go through the
determining whether it is appropriate to make an order dividing
the property at all;
identifying and valuing the assets, liabilities and financial
resources (otherwise known as 'the pool' or
assessing each party's contribution to the pool;
assessing each party's future needs;
determining what is just and equitable in all the
Parental gifts aer an issue at step 3 - when assesing each
party's contribution to the pool.
One of the factors the Court will consider is the direct or
indirect financial contribution made by or on behalf of a party to
the marriage to the acquisition, conservation or improvement of
Parental gifts are financial contributions made on behalf
of...whom? You alone? Or you and your spouse jointly?
Sometimes it's difficult to tell. Parents do not always have
clear intentions about whether the gift is intended for you alone,
or you and your spouse together. The waters are further muddied
because, in almost all cases, your spouse will inevitably receive
some indirect benefit from the gift (e.g. living in the gifted
home, or paying less on the mortgage) – even if it was
intended for you alone.
In most cases, the Court will assume that your parents intended
the gift to go to you alone. Therefore, the gift will be counted as
your contribution to the marriage. This doesn't necessarily
mean that you will "keep the house" – but it will
certainly work in your favour.
If your spouse wants to argue that the gift should be counted as a
joint contribution, he/she will need to provide evidence that your
parents intended to give the gift to both parties. This is
difficult to prove, but has been successful in some cases (for
instance, where the gift is in recognition of both parties'
service to one party's parents).
The fact that the property is registered in the name of one or
both parties is not determinative. The Court has wide powers to
alter property interests and order the transfer of property between
What does this mean for me?
If your parents provide a financial gift, it's better for
you if they provide it to you alone. Of course, this is ultimately
a decision for your parents, not you.
If you are the other party, and your spouse's parents
provide a financial gift, you may wish to seek some clarification
about who exactly the gift is intended for. If it's intended
for both parties, it's preferable to get that in writing.
Ultimately, the best way to quarantine certain assets
from the matrimonial pool is to enter into a binding financial
agreement. This can be done before or during the marriage, and
provides far more certainty for everyone involved.
Sect.117 can deal with false statements and knowingly making false allegations of violence could justify a costs order.
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