'source of funds' Scotland

mcgtech

Hi, my wife and I have separated and are working through the split of marital assets.

During our marriage her father inherited a cottage that he sold and then gave each of his children an amount from this. He sent it to my wife's account and she transferred it to our joint account and I then used this to clear our mortgage.

She is now saying that she's been advised that she is entitled to this amount (£76K) as "fact thats its traceable and came from my father its then source of funds".

My lawyer said, no its covered under matrimonial assets, its treated the same as if it were used to put in new bathroom/kitchen etc.

What is the best way to proceed with this?

Many thanks.

tacpot12

The best way to proceed is to discuss what would be fair under the circumstances. If you and her can agree what is fair, and I think you need to take into account what the rest of financial settlement looks like to do this, it will be easier than trying to argue in court for a settlement that one party feels is fundamentally unfair.  

It seems that even if you end up giving her £76K more than you receive yourself in the seperation, you have had a financial benefit from that money while you were married because you didn't have to pay any mortgage interest. (You didn't mention how long ago she received the money so we can't know how much this has been worth to you).

It seems you have little claim to the money, but if the situation were reversed, would she find it easy to allow you to keep it all?  If you really need some capital to restart your life, and some portion of the £76K would make a big difference to being able to do so, I would argue that you should have some of it, based on your need. This is why you need to factor in what the rest of the settlement looks like; if this money is the majority of the matrimonial assets, you should perhaps have more of it. If it is a tiny portion of the assets, then letting her keep all of it seems fairer.  

mcgtech

Many thanks tacpot.
I also drew down £50k from a pension pot that she regards as savings and wants half. However we have agreed to leave pensions alone. Does she have a claim on that?

Gavin83

mcgtech said:

Many thanks tacpot.
I also drew down £50k from a pension pot that she regards as savings and wants half. However we have agreed to leave pensions alone. Does she have a claim on that?

Yes she’ll have a claim on that. Similarly you’ll also have a claim on the £76k her dad gave her. You could suggest you both ignore each others amounts.

One thing though. You say you’re ignoring pensions. Why? Who has the bigger pension?

Hoenir

On what basis have you agreed to ignore pensions ?  Sometimes worth more than property assets. 

mcgtech

My financial advisor reckons its not worth the pain and cost to chase. I take it when you mean 'claim' on each others amounts, its gonna be for court to decide if we cant agree?

_Penny_Dreadful

Are all the posters clear that this divorce is happening in Scotland and that Scots Law is very different to English law in this area? At least that’s my understanding from the thread title. 

The Scottish courts do not consider any assets that were owned prior to the marriage, inherited during the marriage or obtained after the date of separation, to be included in the matrimonial pot. However, business interests, pensions and life policies can be included in the matrimonial property. This would mean that any debt acquired during the course of the marriage will also be considered a part of the matrimonial pot.

mcgtech

Thanks Penny, yes you are correct, we live in Scotland. Here father lives in England though I am sure that makes no difference.

mcgtech

Also, her father inherited a cottage from his parents, kept it for long time, then sold it and gave some of the cash to his children, so its not a direct inheritance.

_Penny_Dreadful

As I understand it gifts from 3rd parties can also be exempt from the matrimonial pot.  It boils down to who was the recipient of the gift, your wife or both of you, and what was done with the money.  Even if the money were gifted solely to your wife the fact that the money was used to pay down the mortgage on the matrimonial home works in your favour.  The gift might not have matrimonial when it was given but it became matrimonial when it was used to pay down the mortgage on the matrimonial home and it would be down to your wife to present an argument as to why she should be credited with the gifted money in the divorce.

mcgtech

Thanks Penny