In early July, the Supreme Court provided its judgment on Standish.
This high-profile financial remedies case focused on non-matrimonial property and how it can be matrimonialised, that is, become an asset of the marriage (which can be shared) rather than an asset held in isolation by one of the parties (and retained as a result).
Our Family Lawyers examine the case and what it means for non-matrimonial property in Divorce.
Case Summary: What Happened in Standish v Standish?
Standish was an appeal by the Wife to the Supreme Court following an earlier, failed appeal to the Court of Appeal.
In the first instance, the Wife had been awarded £45m.
She believed that she may be entitled to more and applied to the Court of Appeal. The Husband cross-applied, on the basis that the award was too high and that the Wife was actually entitled to less.
Sadly for the Wife, the Court of Appeal unanimously agreed and her award was slashed by £20m, the largest ever reduction of a divorce award in English history.
The Wife then applied to the Supreme Court, likely in the hopes of redressing this.
The Supreme Court, by unanimous agreement, reflecting on the Court of Appeal decision, once again erred on the side of the Husband.
Key Legal Principles from the Supreme Court Judgment
The Supreme Court clarified the law to be:
- Matrimonial property is generally to be divided equally;
- Non-matrimonial property is not capable of being shared; and
- Property can be matrimonialised, though this will depend on circumstances in each particular case and will take place over time. If assets are matrimonialised, they can be divided equally, subject to exceptions.
How Will This Affect Financial Remedy Proceedings?
The judgment in Standish will have ramifications in the big money cases, where the asset base of the parties exceeds their respective needs.
As such, it will become increasingly important to document the intention of how an asset should be treated when it forms part of the currency of the relationship.
For instance, if the family home was owned by one party prior to the relationship but then is used as the matrimonial home, there is an argument that it should be considered a matrimonial asset.
It’s therefore more important than ever to consult lawyers who specialise in wealth protection to ensure that your assets are being appropriately dealt with.
Common asset protection measures include the following:
Cohabitation Agreements: Clarity for Unmarried Couples
These agreements formally record the financial arrangements between unmarried, cohabiting partners and, whilst unbinding, will assist in providing documentary evidence as to how the parties agreed to deal with their assets during the earlier part of their relationship.
If the parties marry, the cohabitation agreement can form a template for the nuptial agreement, provided that it fulfils the nuptial agreement criteria (below).
Nuptial Agreements: Proactive Wealth Protection in Marriage
A nuptial agreement sets out what should happen to finances and assets in the event of a divorce.
Whilst not strictly binding, they are highly persuasive if properly drafted and if they follow the legal test that they are (i) freely entered into, (ii) with a full appreciation of its implications, and (iii) are fair.
Nuptial agreements are increasingly being upheld by the court, and whilst we are not yet at a point where they are binding, if properly drafted, they are often regarded as the best way to protect wealth during the currency of a relationship.
Declarations of Trust: Clarifying Ownership in Property
These trust instruments formally record the beneficial interests in a property and can be helpful to show the extent to which a property is to be considered matrimonial.
This provides clear legal evidence of each party’s financial interest and can help avoid disputes at a later stage.
Trusts and Corporate Structures: Considerations and Risks
Trusts can form part of dynastic wealth planning, but are often unhelpful to protect wealth during a relationship or marriage.
This is because the court has the power, in financial remedies proceedings on divorce, to vary trusts which they deem to be nuptial in nature and transfer shareholdings.
As such, you should seek expert advice from a Wealth Protection lawyer if you would like to consider this option as part of family financial planning.
Each of the options outlined above can play a critical role in wealth protection planning.
Speak to Our Family Wealth Protection Experts
At Myerson, we regularly work with individuals to provide a holistic wealth protection offering, ensuring the best possible client experience.
If you would like to get in touch regarding how we can assist, please do not hesitate to contact our Family team on:
0161 941 4000
Joe Ferguson
Associate
Joe joined Myerson’s Family Law team as an Associate in September 2024 and is known for his expertise in high-net-worth financial remedies and complex children cases, including those with international elements.
He advises on various family law matters, such as divorce, financial settlements, pre- and post-nuptial agreements, child arrangement disputes, and surrogacy. Recognised for his client care and discretion, Joe sensitively supports high-profile clients, tailoring his advice to their unique circumstances.
A member of Resolution, he promotes constructive approaches to family law while prioritising the needs of children. Joe’s insights have been featured in leading publications, and he engages with the legal community through his popular Instagram account and the Manchester Young Professionals Committee.
About Joe Ferguson