Standish v Standish: What it Means for Divorce and Protecting Pre-Marital Assets
Overview
The recent case of Standish v Standish has been massively talked about in the media and by Family Law professionals. When it comes to how pre-marital wealth is treated during divorce, it’s one of the most significant decisions made in recent years.
If you’re married and have brought money, property or a business into the marriage, this is a case worth reading about. We will explain what happened in the Standish v Standish case, what we can learn from it, and how it could affect you.
What was the Standish v Standish case about?
The husband and wife began their relationship in 2003 and married in 2005, and they had two children together. The husband had built up significant wealth before they met, from a highly successful career, whereas the wife had modest assets before the marriage.
In 2017, the husband transferred around £77 million to his wife as part of a tax planning exercise. He had the intention that it would be placed into a Trust for their children. However, the trust was never set up.
When the marriage eventually broke down, the wife started divorce proceedings in early 2020. Her case was that the £77 million that her husband transferred to her had become matrimonial money, meaning it should be divided equally, along with their other assets. The husband argued that as the money was linked to his pre-marital wealth, it should be treated as non-matrimonial and therefore not divided equally.
Initially, the court found that the £122 million of the couple’s total £132 million in assets were matrimonial, including the £77 million transferred to the wife. This meant that the money would be split under the usual sharing principles. The wife was awarded £45 million, which is around a 60/40 split in favour of the husband.
What did the Court of Appeal decide?
The wife appealed this, arguing she should receive half of the total assets, which would be around £66 million. Meanwhile, the husband also appealed, arguing the assets were from before their marriage and therefore should not be shared equally.
The Court of Appeal agreed with the husband and reduced the wife’s award to £20 million, which is the largest reduction the UK courts have seen in a divorce appeal.
The decision focused on the idea that where the money comes from is an important factor in how it should be divided. To read the full judgment, head over to the UK Supreme Court website.
What have we learnt from this case?
The key takeaway from the Standish v Standish case is that source of wealth really matters. The courts looked carefully into whether the assets were brought into the marriage by one person, or built up during the relationship. In this case, because most of the money came from the husband’s pre-marital wealth, it was treated differently to if it was assets acquired together.
Another key takeaway is that it highlights how important it is to keep clear records of where your wealth has come from. Being able to show what was owned before the marriage and how it was managed during the relationship can have a massive impact on the outcome if you separate as a couple.
It’s important to note that this doesn’t mean that couples who divorce will get to keep everything they had before the marriage, the Family Courts will still put the needs of both parties first, especially where children are involved.
To learn more about how finances are sorted during divorce, you can visit the Gov.UK website or the Citizens Advice guide on dividing money and belongings.
How could this affect future family court cases?
Although this case does not change the law, it gives stronger support to arguments that pre-marital assets can be treated differently. If you have property, savings or a business that you owned before the marriage, this case makes it clearer that the courts may be willing to keep those separate, provided it does not affect meeting the needs of your former partner or any children involved.
Because of this, more people may choose to make a pre-nuptial or post-nuptial agreement to protect their assets. These agreements are not automatically legally binding, but the courts increasingly take them into account, particularly if they have been drawn up properly and fairly.
How Bell Lamb & Joynson can help
We know talking about money can be difficult, but taking steps early on can give you and your family peace of mind.
At Bell Lamb & Joynson, we have been helping families for over 200 years. Our friendly, experienced team can guide you through making a pre-nuptial or post-nuptial agreements, or give you advise if you are already married and want to understand your position. If your relationship has already broken down, we can support you with divorce proceedings and work with you to achieve the best possible outcome.
Get in touch with us today if you need advice or to book an appointment.