The case of Standish v Standish [2024] EWCA Civ 567 is utilised by lawyers as pivotal guidance when dealing with non-matrimonial assets, in particular, the ‘mingling’ or ‘matrimonialisation’ of non-matrimonial assets. The way in which non-matrimonial assets are treated determines whether such property is subject to the sharing principle in a divorce.
Background of Standish v Standish
Mr and Mr Standish’s marriage lasted 15 years. Mr Standish had accumulated a significant amount of wealth (in comparison to Mrs Standish) before the parties married. One of the significant financial events of this case is that in 2017, Mr Standish transferred investment funds of approximately £77 million to Mrs Standish as part of a tax and planning arrangement. The intention was for the funds to be placed in a trust for both of their children in the future however, Mrs Standish issued divorce proceedings before the trust was set up.
Following this, it was Mrs Standish’s argument that the funds were gifted to her by Mr Standish at the time and therefore that the funds had been ‘matrimonialised’ so they should be subject to division as part of the settlement along with the other assets she considered to be matrimonial. Mr Standish contended the funds should be regarded as non-matrimonial property, with the wealth having been accumulated before the marriage, and should be ringfenced from the settlement.
Decision made by the Court of Appeal
The first instance Judge decided that £77 million had been matrimonialised and should be, in part, subject to the sharing principle.
The Judge found that of total assets of £132 million, £112 million was matrimonial which lead to Mrs Standish being awarded £45 million.
Both parties appealed the trial Judge’s decision with Mrs Standish seeking a division closer to 50/50 and Mr Standish seeking a higher award due to the wealth he had accumulated prior to the marriage.
Mr Standish was successful and the Court of Appeal reduced Mrs Standish’s award significantly to £20 million. Importantly, the Court of Appeal emphasised that the trial Judge’s application of the sharing principle was flawed and resulted in an unjustified division of the assets in Mrs Standish’s favour.
Mrs Standish has been granted permission to appeal again and further developments are expected in this case later this year.
Significance of the case so far
This case highlights the importance of the source of assets when being taken into consideration in financial remedy proceedings and signifies that even where an asset is transferred between spouses, it will not automatically be assumed to be subject to the sharing principle.
Typically, pre-marital wealth that has not been matrimonialised is ringfenced and is only considered for sharing when the needs of one or both parties cannot be met through division of matrimonial assets.
What could have helped?
If Mr and Mrs Standish had entered into a pre-nuptial agreement prior to their marriage such an agreement could have dealt with Mr Standish’s wealth accumulated solely by him, and how it should have been treated upon divorce, i.e. clearly recording the intentions of both parties before the marriage was entered into. Similarly, a post-nuptial agreement could have dealt with their intentions, at the time, regarding any subsequent assets or transfers. Although such agreements are not legally binding, they form part of the circumstances of a case and if they have been prepared properly and do not disadvantage any children or unfairly disadvantage one party, they will be given weight by the Court.
Have I ‘matrimonialised’ assets that I brought into the marriage?
For instance, when one spouse brings in a large sum of money into the marriage, it will be non-matrimonial in nature. If that money has subsequently been used as a deposit for a property which is to be held in the names of both spouses or utilised in some way within the marriage; this essentially ‘matrimonialises’ the sum of money and as a result it may no longer be considered non-matrimonial property.
The sum of money that was once non-matrimonial is now, due to the way it has been treated, matrimonial. This can be a complex area of law so if you need further advice in relation to sharing and non-matrimonial assets, you should seek advice from a family lawyer.
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