The impact of Standish v Standish in UK family law divorce proceedings
Earlier this year, the Court of Appeal case of Standish v Standish gave us key guidance on how the courts view the division of matrimonial and non-matrimonial assets in UK divorce proceedings. This landmark case provided important clarification on what key factors are taken into account whilst determining fair financial remedies in a divorce settlement, and how this doesn’t always mean the equal sharing of assets.
What are matrimonial and non-matrimonial assets?
Matrimonial assets are assets which were obtained and built up during the marriage, and form a part of the “marital pot”. These assets include things such as the family home, pensions and any savings/investments that were built up over the course of the marriage/relationship. When producing a financial order within divorce proceedings, these matrimonial assets will all be subject to the sharing principle and will be shared accordingly between both parties.
Non matrimonial assets are assets which were attained typically before the marriage/relationship begun or after separation. These include things such as pensions built up prior to the relationship or any inheritance acquired after separation. These assets are not typically shared in divorce proceedings, however on occasions where the “marital pot” is not enough to meet both parties financial needs, non-matrimonial assets can be used to ensure the needs are met.
What happened in the case of Standish v Standish?
This case involved a couple who married in 2005 and had two children together. The husband was a successful business man with substantial pre-marital assets and considerable wealth. The wife came into the relationship with minimal assets. During the relationship, the wife stayed at home and cared for the children.
During the marriage in 2017, the husband transferred £77 million to the wife for inheritance tax planning purposes, with the view that it was to be placed on trust for the children. However the money remained in the wife’s name and when the divorce proceedings commenced in 2020, this became a central issue.
What were the key issues?
One of the key questions for the judge to consider in this case was whether the pre-marital assets had now become matrimonial as a result of the transfer into the wife’s name. The husband argued that the majority of these assets transferred were his prior to the marriage and should therefore be classified as non-matrimonial for the purposes of the divorce proceedings.
What did the Courts decide?
Initially, the High Court ruled in favour of the wife and accepted that the transfer of the assets had “matrimonialised” the assets, and the Court ruled that £122 million of the £132 million of assets were matrimonial and subject to equal division. The Court then awarded a 60/40 split of the matrimonial assets in favour of the husband.
The wife appealed this decision on the grounds she wanted half of the total parties wealth of £132 million. The court of appeal dismissed this appeal and allowed a cross appeal from the husband, who argued that as the money was attained before the marriage, it should therefore be viewed as non-matrimonial and not subject to the sharing principle.
The Court of Appeal ruled in favour of the husband and overturned the High Court’s previous ruling, really focusing on the source of the assets rather than the name it was held under. This resulted in a significant reduction of the wife’s award and provided important clarity on how matrimonial and non-matrimonial assets are to be determined in divorce proceedings.
What is the significance of this case?
This case highlights the importance of clarifying your matrimonial assets and just because an asset is brought into marriage, doesn’t automatically result in it being matrimonial. The Court of Appeal also clarified that the source of an asset will be a key factor as to whether it is considered matrimonial, and therefore subject to the sharing principle.
Guiding You Through Divorce:
If you need expert advice on divorce proceedings, including the division of matrimonial and non-matrimonial assets, visit our Divorce and Family Law page for more information. Alternatively, you can contact our experienced team of family law solicitors on 01305 771000. We’re here to help.
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