What is a schedule of matrimonial property in divorce and civil partnership cases?

When spouses or civil partners separate, it is usually the case that they want to separate their finances. Whether or not the marriage/civil partnership has been short or long, and even in situations in which the couple have operated very separate financial lives during the relationship (including only having separate bank accounts), it is important that legal advice is obtained at an early stage in order to ensure fairness is achieved.

In Scottish family law, it is standard practice, and for good reason, for the financial circumstances of each member of the couple to be consolidated in a schedule of matrimonial property (‘the schedule’). The schedule is not a court form and does not itself determine the outcome. Further, there is no standard style of schedule. Rather, it is a working document which, at a glance, creates a shared financial picture, highlights areas of agreement or dispute and provides the figures from which settlement options can be explored.

The legal starting point

The separation of finances on separation is governed principally by the Family Law (Scotland) Act 1985. Generally, ‘matrimonial property’ includes property belonging to either or both spouses or civil partners at the date of separation (known as the “relevant date”) and which was acquired during the marriage or civil partnership and still existed at the relevant date. Property acquired before marriage for use as the family home, or as furniture or plenishings for it, may also be included. Gifts or inheritances from third parties are usually excluded while they remain in the form received, although the position may change if they are converted into another asset during the marriage/civil partnership.

Accurate and early identification of the relevant date is vital in allowing resolution to progress and the schedule should, so far as possible, show all relevant assets and liabilities as at that date. It is not uncommon for separated couples to disagree as to the relevant date, but such a disagreement inevitably creates complexity and can cause delay in progress.

Once the relevant date has been agreed, one way of approaching resolution is to ask three questions:

1. What is the matrimonial property? This is usually fairly easy to identify as it is simply a case of listing all assets and liabilities which existed at the relevant date in accordance with the principles of the 1985 Act. Once identified, those assets and liabilities are listed in the schedule.
    
2. What is the value of the matrimonial property? This can often be the most protracted part of the process. If, for example, the cash equivalent transfer value (CETV) of a pension requires to be obtained, it can take weeks or months from applying for that CETV until it is made available. Once a valuation of an asset or liability is obtained, the figure is inserted into the schedule.
    
3. How can the matrimonial property be divided fairly? The statutory starting point is fair sharing of the net value of the matrimonial property, with equality generally regarded as fair unless special circumstances justify a different division. The figures in the schedule allow the solicitor to calculate the division of matrimonial property.

What does the schedule contain?

A well-prepared schedule will list each asset and debt, identify whether it is held jointly or by one spouse, state the relevant-date value and record the supporting evidence. Typically, entries will include the matrimonial home and mortgage, bank and savings accounts, investments, pensions, business interests, vehicles, valuable personal items, loans and credit-card balances.

Documents evidencing each figure, known as ‘vouching’, are essential. These may include bank statements, mortgage redemption figures, property valuations, pension CETVs, company accounts and finance statements. Pensions can require particular care because only the proportion attributable to the period of marriage is generally included, and specialist actuarial advice may be appropriate in circumstances where the history or benefits are complex.

Why accuracy matters

A schedule is often revised several times as disclosure is exchanged and valuations are obtained. That is normal. What matters is that both parties check it carefully, disclose all relevant assets and liabilities and identify any assumptions or missing vouching. Errors can distort the net matrimonial property, undermine negotiations and increase the time and cost required to reach agreement.

Once sufficiently complete, the schedule allows lawyers to calculate the net total, compare what each spouse would retain under different proposals and identify any balancing payment or property transfer required. It can therefore support negotiation, mediation, collaborative practice or litigation. Used properly, an accurate and comprehensive schedule of matrimonial property can turn a potentially overwhelming collection of financial information into a transparent framework, providing the basis for informed advice and, ultimately, a fair and workable resolution.