Post-separation accrual - what happens to wealth accumulated after separation?

In English divorce law, post-separation accrual refers to wealth or assets acquired after separation but before a financial settlement is reached. These assets may still be included in the matrimonial pot, depending on how they were acquired and whether they relate to the marriage.

What is post-separation accrual?

Post-separation accrual is the term used for wealth or assets accumulated after separation but before the final financial settlement. This can include:

• Company shares
• Property portfolios
• Inheritances
• Bonuses

Whether these assets are considered matrimonial or non-matrimonial depends on how they were acquired. The law broadly categorises post-separation accrual into three types:

1. New ventures

A new venture is a business or investment started after separation, with no connection to marital assets or funds.

• If the venture is entirely independent, it is likely to be treated as non-matrimonial and excluded from division.
• However, if matrimonial funds were used to start the venture, it may be considered matrimonial property.

Case reference: In Rossi v Rossi [2006] EWHC 1482, it was held that an asset acquired following separation may be considered a non-matrimonial asset if the asset was acquired by virtue of one’s own personal performance or industry, rather than passive growth.

2.  Passive growth

Passive growth refers to the natural increase in value of existing matrimonial assets, such as:

• Property appreciation
• Stock market gains
• Pension growth
• Cryptocurrency or investment returns

These increases are typically shared equally, as they stem from assets acquired during the marriage.

3. Active growth

Active growth occurs when one party takes deliberate steps to increase the value of an asset post-separation.

• The court will assess whether the growth was due to personal effort, market conditions, or external support.
• If the increase is due to one party’s exceptional performance, they may argue for that growth to be ringfenced.

The court will approach this category on a case-by-case approach, with careful consideration in relation to whether such growth is due to the hard work and effort of one spouse, or whether there has been an element of luck (such as favourable market conditions).

Common questions about post-seperation accrual

I RECEIVED A BONUS after SEPARATION - does my spouse get a share?

Possibly. This can often be a controversial area of family law.

In O’Dwyer v O’Dwyer [2019], Mr Justice Francis ruled that a bonus earned during the marriage but paid after separation can be treated as matrimonial property.

• If the bonus is paid within 12 months of separation, it is likely to be included.
• The court will consider the timing and nature of the bonus.

My Business Grew After Separation, Can My Spouse Claim a Share?

It depends on whether the growth was passive or active:

• Passive growth (e.g. market-driven) is more likely to be shared.
• Active growth (e.g. your personal effort) may be ringfenced.

The court will also consider:

• Your role in the business
• External support (e.g. consultants, stakeholders)
• Market conditions

Careful analysis will be required regarding your business and your role in increasing the value. At Vardags, our unique financial forensics team are specially placed to do this.

 I Inherited Wealth After Separation, Is It Shared?

Generally, no. Inheritance received after separation is considered non-matrimonial and is usually ringfenced, unless there are exceptional circumstances.

Why Is Post-Separation Accrual Important?

Financial remedy proceedings may last months, or even years depending on the complexity of the case and the conduct of the parties. During this period, either party may accumulate wealth; therefore, increasing the matrimonial assets available for division upon settlement.

The assets that are available for division are generally considered as at the date of settlement or the final hearing. This means that any wealth accrued following separation will be included in the matrimonial pot.

This is important because post-separation accrual can have a significant impact on the financial settlement where one party has made significant contributions towards the matrimonial pot and therefore seeks an adjustment in their favour.

If you are considering or going through a divorce and are concerned about your spouse’s potential claim to assets you have accumulated post-separation, contact Vardags today for a free initial consultation with one of our expert divorce solicitors.  

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