Clarifying the Treatment of Matrimonial Property in Divorce Settlements

On 2 July 2025, the UK Supreme Court delivered a significant judgment in Standish v Standish, a case that has reshaped the legal landscape regarding non-matrimonial assets in divorce proceedings. This ruling provides long-awaited clarity on how the courts will distinguish between matrimonial and non-matrimonial property, and it resulted in the largest reduction of a divorce settlement ever recorded in the United Kingdom.

The decision marks a turning point in how inherited wealth or wealth acquired prior to marriage, is treated in the context of divorce proceedings in non-needs-based cases.

Financial Settlements Before Standish

Since the decisions in White v White (2000) and Miller/McFarlane (2006), the courts have applied the “sharing principle” to the division of assets on divorce. This principle establishes that assets built up during the marriage through the joint efforts of both parties should be divided equally, regardless of legal ownership or which spouse was the primary earner.

However, these earlier cases left unresolved questions of how non-matrimonial property, such as inherited wealth or assets acquired before the marriage should be treated. More specifically, there was legal uncertainty around the concept of “matrimonialisation”, where non-matrimonial assets become subject to division through their treatment during the marriage. Further confusion developed as judges exercised discretion to divide assets for the fairest outcome, leading to questions as to when non-matrimonial assets might also be shared at the point of divorce.

Divorce Proceedings in Standish

Mr. Standish, a highly successful financier, accumulated significant wealth before meeting his wife. The couple married in 2005 and relocated to England in 2010. Mr. Standish retired in 2007, and Mrs. Standish remained a homemaker throughout the marriage.

In 2017, Mr. Standish transferred £80 million into Mrs. Standish as part of a tax planning arrangement, with the expectation that she would place the funds into a trust for the benefit of their children. That trust was never created, and when divorce proceedings began in 2020, the funds remained in Mrs. Standish’s name.

During the initial High Court proceedings, Mrs. Standish argued that the funds should not be considered Mr. Standish’s non-matrimonial assets but, had become matrimonial property due to the transfer and should therefore be shared. The High Court agreed, finding that the transfer had matrimonialised the asset. However, noting the money originated from Mr. Standish’s pre-marital wealth, the court awarded a 60/40 split in Mr. Standish’s favour, resulting in a £45 million financial settlement to Mrs. Standish.

Mr. Standish appealed, and in 2024, the Court of Appeal overturned the High Court’s decision. The appellate court ruled that the transfer did not demonstrate a clear intention to share the asset. Consequently, the £80 million retained its non-matrimonial status and was excluded from the shared pot. Mrs. Standish’s financial settlement was reduced to £25 million, representing half of the actual matrimonial assets.

Both parties appealed this decision, Mr. Standish to further reduce the award and, Mrs. Standish to reinstate the larger High Court award.

The Supreme Court’s Judgment

The Supreme Court unanimously dismissed Mrs. Standish’s appeal. It agreed with the Court of Appeal’s conclusion that a unilateral transfer of a non-matrimonial asset does not, in itself, mean that the asset becomes matrimonial property. The Court stated that for an asset to be matrimonialised, there must be both a clear intention to share and a pattern of behaviour or treatment over time that supports this intention.

Importantly, the court held that ownership alone is not a determinative factor. The fact that the £80 million remained in Mrs. Standish’s name was not enough to justify treating it as a matrimonial asset, particularly given that the original transfer was made for tax planning purposes and not as part of a genuine effort to share wealth.

The judgment clarified that the sharing principle applies only to matrimonial assets either acquired during the marriage as part of the couple’s joint endeavour or through matrimonialisation. Non-matrimonial assets, including those acquired prior to the marriage or received through inheritance, remain outside the scope of the sharing principle unless there is compelling evidence of a mutual intention to treat them as shared matrimonial property.

The Importance of Documenting Intention – Prenuptial Agreements

This case underscores the legal significance of intention when it comes to the treatment of assets in marriage. When intention is not clearly documented, particularly in high-value or complex financial relationships, courts must rely on inferences drawn to reach their conclusions as to the marital status of an asset, an inherently uncertain process.

The judgment highlights the value of pre-nuptial and post-nuptial agreements in helping couples establish their intentions clearly and in advance. Such agreements can help avoid mischaracterisation of non-matrimonial property and reduce the risk of contentious litigation.

Broader Implications and Forward-Looking Considerations

The Standish decision marks a major development in the evolution of family law and is likely to influence the drafting of financial agreements and the conduct of divorce proceedings in years to come. It provides welcome guidance to legal practitioners and clients, especially those with significant pre-marital or inherited wealth, about the degree of protection afforded to non-matrimonial assets and the process of matrimonialisation.

The judgment will have a pronounced impact on high value case decisions, especially those where the assets in question exceed the parties’ basic post-divorce needs. The ruling does not detract from the court’s fundamental objective of a needs-based approach to financial awards. In fact, courts will continue to prioritise meeting both parties' financial needs and arguments for the ringfencing of assets that pre-existed the relationship will now be more likely entertained, only once those needs are met.

Crucially, any inter-spouse transfers or joint enjoyment of assets will no longer automatically render assets matrimonial property and the division between matrimonial and non-matrimonial property has therefore become more pronounced.

For high-net-worth individuals, business owners, and families with inherited wealth, it is more important than ever to seek legal advice when entering into marriage or considering the transfer of assets between spouses.

Ultimately, the decision narrows the scope of the sharing principle and reaffirms the line between marital partnership property and pre-existing or inherited wealth. This distinction will not prevent judges from exercising their discretion to ensure both parties needs are met following divorce, however, future decisions to share non-matrimonial assets will require a clear and significantly justifiable reasoning. The ruling therefore reinforces the importance of financial planning and the need for well-structured agreements that address the treatment of assets within marriage.

How We Can Help

Our experienced family law team advises clients on all aspects of relationship breakdown, including asset protection, financial settlements, and pre and post-nuptial agreements. We have extensive experience representing high-net-worth individuals in complex financial cases, and we work closely with our clients and other specialists to provide strategic advice.

If you have questions about how the Standish v Standish ruling could affect your personal or financial situation, or if you wish to discuss any aspect of matrimonial planning or divorce, please contact our team for tailored advice. Call us today on 01622 815940 and book your fixed-fee consultation.

Key Points - How does the Standish Ruling Impact Finances in Divorce?

Courts will now draw a clear distinction between matrimonial and non-matrimonial assets during divorce proceedings.
The sharing principle applies only to matrimonial assets acquired during the marriage through the joint efforts of both parties or to non-matrimonial assets that become matrimonialised.
Pre-marital and inherited wealth will generally be considered non-matrimonial, unless there is evidence of an intention to share.
The transfer of assets between spouses, including for tax or estate planning, does not automatically mean those assets become matrimonial.
Legal ownership of an asset is not determinative. Courts will examine the underlying intent and how the asset was treated during the marriage.
The ruling promotes a more evidence-based, structured approach to dividing assets in divorce, particularly in circumstances where parties initially wish to protect non-matrimonial assets.
Whether assets are matrimonial or not, the court will always consider the needs of both parties as a priority consideration in the division of assets.
Compensation of career sacrifice survives Standish in terms of the distribution of non-matrimonial assets.