On 2 July 2025, in the matter of Standish vs Standish, the Supreme Court handed down a very important judgment to offer clarification for Family Law practitioners dealing with divorce.
When considering a financial remedy order upon divorce, the courts have wide powers to make an order which is designed to achieve a fair outcome. The court considers all the circumstances of each individual case and will apply three principles in reaching its decision.
The Principles
- Needs – the order should ensure that the parties’ needs are met; for example, that they have adequate housing.
- Compensation – for example, if someone has given up a job to raise children, they should receive compensation for the loss of their career.
- Sharing – the starting point for dividing the assets of the marriage is 50/50.
An additional principle
- Non-discrimination that the spouse making the greater financial contribution to the marriage should not necessarily receive greater compensation.
The question for the Supreme Court was how would the sharing principle apply in this case where, in 2017 and shortly before the breakdown of the marriage, the husband had transferred significant funds to the wife for the specific purpose of setting up trusts to negate inheritance tax.
Unfortunately, the wife did not set up the trusts as instructed; she retained the funds for herself and not for the benefit of the children, the intended beneficiaries of the trusts.
Fortunately, for the husband (and children) the Supreme Court did not agree with the wife’s position that the ‘2017 funds’ were a gift to her from the husband and should be shared.
The court distinguished between matrimonial property and non-matrimonial property:
- Matrimonial property – usually derived from the ‘fruits of the marriage’, or a product of the ‘common endeavour’. Should normally be shared equally.
- Non-Matrimonial property – usually acquired before the marriage or if during the marriage, from an external source, such as inheritance. Not subject to the sharing principle, although can be subject to the principles of needs and compensation. An example of this is that if there are insufficient funds from the matrimonial assets to rehouse a party to the marriage, the court is empowered to ‘invade’ funds from the non-matrimonial pot to meet that party’s needs.
The court can also consider whether non matrimonial property has, over time, become shared matrimonial property by a process of ‘matrimonialisation’. For example, rather than ‘ring-fence’ an inheritance, you start to use the funds to renovate the family home or to finance family holidays.
In this case the Supreme Court decided that only 25% of the husband’s ‘2017 funds’ had become matrimonialised and should be shared equally. The husband was allowed to retain the remaining 75% of the ‘2017 funds’ which had not become matrimonialised; they were not shared assets.
Donna Goodsell observes that in this case, a Pre-Nuptial or Post-Nuptial Agreement would have offered a degree of security and financial protection.
As Family Law specialists, at Goodsells Solicitors, we often advise people in precisely this situation, and prepare Nuptial Agreements to define financial arrangements in the event of divorce and importantly, to ensure your peace of mind.
To make an initial enquiry please contact Donna Goodsell on
donnagoodsell@goodsellssolicitors.co.uk or 020 7622 2221