In a landmark decision this month, the Supreme Court has determined that the Court of Appeal’s decision should be upheld in the case of Standish and Standish, and Mrs Standish’s appeal was unanimously dismissed.
The matter concerns Mr and Mrs Standish and is an ultra-high net worth case. Mr Standish had a very successful career in financial services and generated the majority of his wealth before meeting Mrs Standish and having two children together. In 2017, following tax planning advice, Mr Standish transferred assets worth £77 million to Mrs Standish on the understanding that those assets would be settled in trust for the benefit of the children. But before this was done, Mrs Standish filed for divorce.
The case focuses on the principles of matrimonial and non- matrimonial property. Non matrimonial property is generally considered as property acquired before marriage by one party or received as part of an inheritance. There was also consideration as to how assets could become “matrimonialised” and therefore subject to sharing on divorce. The Supreme Court ruled that the Court of Appeal were right to decide that it was the source of the asset which is most important and not the legal title.
The case highlights the importance of Pre-Nuptial and Post-Nuptial Agreements where there is significant wealth, and particularly where one party is seeking to protect an asset from being shared on divorce. Currently Pre-nuptial Agreements are not ultimately legally binding in England and Wales, however, will be considered by the Court and given significant weight if entered into correctly and in accordance with various principles set out by the Court. You can’t help but think that the entirety of this litigation could have been avoided if the parties had entered into such an Agreement in advance (providing they had regularly reviewed and updated where relevant, the Agreement).
There may well be a push for reform to make Pre-Nuptial Agreements fully binding as professionals advocate for greater certainty in the family courts.
Anna Patsalides is an Associate Solicitor at Taylor Walton Solicitors www.taylorwalton.co.uk
