A New Perspective on Asset Division in Divorce: The Standish v Standish Case
The recent case of Standish v Standish sheds light on how British courts divide assets during a divorce.
The Court of Appeal's decision clarifies the concept of "matrimonialisation" and emphasises the source of wealth as a key factor in determining the financial split. In this post, we will explore the court’s decision in Standish v Standish, offering valuable insights for anyone facing a divorce, particularly those with significant assets or complex financial arrangements.
The Case: A £132 Million Fortune Divided
The Standish couple married ‘late’ in life - by the time they wed in 2005, the husband had already amassed a significant fortune (£57 million) from his banking career.
Shortly after the marriage, they settled in the UK. In 2017, to optimise taxes, the husband transferred £77 million worth of assets to his wife. This transfer became a point of contention during their divorce.
The Wife's Argument: Title and Partnership
The wife argued that the transferred funds belonged to her due to their title being in her name. Additionally, she claimed the marriage was a partnership, justifying an equal split of all assets.
The Husband's Argument: Pre-marital Wealth
The husband countered that the transferred funds and his £20 million Australian farm were non-matrimonial assets acquired before the marriage and shouldn't be shared.
Lower Court's Decision: A Balance Tilted
The lower court judge ruled the farm entirely non-matrimonial but considered the transferred funds "matrimonialised" due to the transfer.
This meant they became part of the marital pool to be divided. However, acknowledging the husband's pre-marital contribution, the judge awarded the wife 40% of the total marital assets.
Court of Appeal's Revisions: Source of Wealth Trumps Title
The Court of Appeal disagreed with the lower court's treatment of the transferred funds.
They clarified that simply transferring ownership doesn't automatically make an asset matrimonial. Instead, the court should prioritise the source of the wealth.
The Court of Appeal also found the lower court's decision unfair to the husband. They determined that 75% of the transferred funds stemmed from pre-marital wealth and shouldn't be shared. The remaining 25% would be divided equally.
This resulted in a revised award of £25 million for the wife.
Key Takeaways for Divorcing Couples:
Source of Wealth Matters Most: The Court of Appeal reaffirms that the source of wealth is the primary factor in asset division. Money earned during the marriage is generally shared equally, while pre-marital wealth is typically excluded. However, it can be accessed to meet a spouse's needs.
"Matrimonialisation" Has Limits: Courts won't readily categorise assets as matrimonial simply due to a change in ownership. The asset's origin holds greater weight.
Clear Findings and Established Techniques: Judges are advised to make clear findings about the source of wealth and utilise established methods (like historical cost or straight line) to determine a fair allowance for pre-marital contributions within a mixed asset.
No Need for Formulas: The Court of Appeal discourages formulaic approaches to asset division, citing the complexities and inconsistencies seen in child maintenance calculations. Established principles offer a more robust and consistent framework.
Seeking Legal Advice is Crucial
The Standish v Standish case highlights the importance of seeking legal advice during a divorce, particularly when dealing with significant wealth and complex financial arrangements.
Understanding the principles governing asset division can help couples navigate the process more effectively and ensure a fair and equitable outcome.
If you are facing a divorce and have questions about asset division, our experienced solicitors at Seymours + Solicitors can provide you with the guidance and support you need.
Contact us today at info@seymoursolicitors.co.uk or by calling 01273 628808.