The Supreme Court Decision in Standish v Standish:

The Supreme Court has delivered a landmark judgment in Standish v Standish, bringing long awaited clarity to one of the most convoluted areas of family law: the distinction between matrimonial and non-matrimonial property. The intention of the judgment was to provide a structured and practical framework for determining when non-matrimonial assets become “matrimonialised” and subsequently available for division under the sharing principle upon divorce.

The case involved high-value financial remedy proceedings, where the husband (Mr Standish) transferred approximately £80 million of his pre-marital wealth into the wife’s (Mrs Standish) sole name. Crucially, this transfer was carried out for inheritance tax mitigation purposes, ultimately to benefit the children, and on Mr Standish’s case, not with the intention of sharing.

Mrs Standish argued that, by virtue of the transfer, the assets had become matrimonial in nature and should therefore fall within the scope of the sharing principle, where the starting point is equal division of matrimonial assets upon divorce. However, both the Court of Appeal and the Supreme Court rejected this argument. In the Court of Appeal, Lord Justice Moylan concluded that matrimonialisation did not occur as although the title had changed, it was the source of the assets that is determinative. Similarly, the Supreme Court held that the assets had not been matrimonialised as the transfer did not demonstrate an acceptance that the assets would be shared.

Broadly, the transfer did not amount to matrimonialisation, therefore, the assets remained non-matrimonial and fell outside the equal sharing regime.

Although the judgement reaffirms the established distinction between matrimonial and non-matrimonial property, some scholars argue that it has failed to provide clarity on the concept of matrimonialisation.

• Matrimonial property can be likened to the fruits of the marriage. Namely, the assets acquired during the marriage through the joint efforts of the parties.
• By contrast, non-matrimonial property, typically consists of assets brought into the marriage by one party or acquired via inheritance or gift. Although they are not automatically excluded from financial consideration, there is a heavy burden to prove that the assets should be shared unless it is to meet the needs of the parties

Significantly, at the heart of the Supreme Court’s decision is the introduction of a two-limb test to determine whether a non-matrimonial asset has been matrimonialised.

“Matrimonialisation occurs where there is intention by the contributor to share the non-marital property, coupled with treatment by the parties of this non-marital property as shared over-time.”

In essence, this test requires both:

1. A clear intention (express or implied) to share the asset; and
2. Conduct over time that reflects the asset being treated as jointly owned.

In Standish, while the legal title had changed, the underlying purpose and ongoing treatment of the assets made clear that no intention to share existed. Both parties agreed that the intention behind the transfer was to settle the assets into a trust to avoid inheritance tax and ultimately benefit their children. Significantly, intention was a highly relevant fact as it precluded an inference that Mr Standish ever intended to share the transferred assets with his wife.

Some argue that had the intention been for Mrs Standish to hold the assets and apply them for the benefit of the family (not exclusively for the children), the outcome may have been different. Relatedly, some assert the categorisation of this asset as non-matrimonial undermines the purpose of gifting to a spouse. However, the Court confirmed that in addition to intention, what matters is the substantive use and treatment of the asset throughout the marriage.

The ruling also reinforces the centrality of fairness and judicial discretion in financial remedy proceedings under Section 25 of the Matrimonial Causes Act (MCA) 1973. Courts must have regard to “all the circumstances of the case” when making financial orders, including how the parties have treated specific assets during the course of their marriage.

Standish aids Courts in applying this discretion more predictably, especially in complex financial landscapes involving trusts and pre-acquired wealth.

Ultimately, whilst Standish provides some guidance in a complex area of family law, arguably the brief and somewhat ambiguous judgment has left many practitioners with more questions than answers. It could be said the decision has done little to clarify the already blurred concept of matrimonialisation, which continues to exist on a grey spectrum. Some commentators suggest that, aside from raising the evidential bar for proving that an asset’s character has changed, the ruling simply reaffirms existing legal principles.

However, what Standish does underscore, is the critical importance of collaboration between wealth advisors and family lawyers. Had a nuptial agreement been entered into in respect of the transfer, alongside the tax and estate planning, it may have been easier to demonstrate that the transferred assets were not intended for sharing on divorce.

Ultimately, it is hoped that by laying down a test for matrimonialisation, the common practice of arbitrarily alighting on a 60/40 division from equality can now be suppressed and judges will be encouraged to identify non-matrimonial property more robustly to dissuade them from using a modest departure from equality as a starting point.

Overall, the key take-aways from Standish are:

1. Non-matrimonial assets remain outside of the sharing principle unless there is compelling evidence of intention and shared treatment over time.
2. Non-matrimonial property may be matrimonialised, but only with an intention to share and subsequent shared treatment over-time.
3. Each case will turn on its facts as the courts must assess not just legal title, but also the substantive integration of the asset into a couple’s financial life.
4. Transfers between spouses for inheritance-tax planning purposes do not automatically imply a gift or intention to share.
5. Proving matrimonialisation remains a high bar
6. The relationship between family lawyers and wealth advisors is vital – without input from both, families risk uncertainty and costly litigation. A nuptial agreement should certainly be considered.