In a recent family law case, Standish v Standish, the Court of Appeal has provided clear guidance on the treatment of existing assets brought into a marriage during financial remedy following divorce, also clarifying when assets become ‘matrimonialised’, and therefore subject to division between the separating parties.
This decision has significant implications for couples who are contemplating divorce or separating and need to understand how the division of assets will be affected, as Anthony Jones explains.
Details of the Case
Where any financial remedy case is being considered following a divorce, the sharing principle is a key factor. This denotes that ‘matrimonial assets’ are to be shared in equal proportions unless there is a good reason to depart from equality. The classification of assets and whether they are considered as ‘matrimonial assets’ or ‘non-matrimonial assets’ can therefore be significant in some cases, particularly where significant wealth has been brought into a marriage by one party.
This instance was the case in Standish v Standish, where the husband (a UK national) had acquired a significant portfolio of wealth prior to getting married to an Australian national wife in 2005. In 2017, the husband transferred £77 million of assets to his wife, in an exercise to protect against inheritance tax. The central issue in the case was whether these assets should be treated as ‘matrimonial’ or ‘non matrimonial’.
The court originally ruled that the assets had become matrimonialised due to the transactions that took place in 2017. Whilst the judge found there was a further c.£20 million of non-matrimonial assets (not to be shared), he concluded that the ‘matrimonial property’ to be subject to the sharing principle included the £77 million and therefore totalled £112m million.
Following the ruling, which awarded 60% of the marital assets to the husband and 40% to the wife, the wife appealed, stating that the shares in the transferred assets we in her own name and therefore her property. Despite this, the wife conceded that they should be treated as matrimonial property, but sought a 50/50 division.
The Court of Appeal Decision
The husband cross-appealed on the basis that rather than title or autonomy, the original source of the funds should be considered and given appropriate recognition. This cross appeal was upheld, with the Judge finding that the source of the asset, and not the title, was the critical factor. This overturned the original finding that transferring title alone can lead to matrimonialisation of assets.
The ruling in Standish v Standish provides welcome clarity to family law practitioners and litigants. This case provides clear guidance about whether assets that one party brought to the marriage should be treated as matrimonial or non-matrimonial.
This decision is important for couples who are contemplating divorce and want to understand how their assets will be divided.
For further help or advice, please get in touch with our experienced family law team.
