Prenups, Planning, and the Price of Divorce: Lessons from Standish
On 2 July 2025, the Supreme Court unanimously dismissed the wife’s appeal in Standish v Standish [2025] UKSC 26, upholding the largest ever reduction in a financial award on divorce, from £45 million to £25 million. The outcome reinforces the value of taking early legal advice to effectively combine strategic financial planning, careful asset structuring, and well-drafted nuptial agreements for high-net-worth individuals seeking to safeguard pre-marital, gifted, or inherited assets.
Background – transfer of investments
The appeal centred on a portfolio of investments (“the 2017 Assets”), which the husband transferred from his sole name into the wife’s sole name in 2017 as part of a tax planning scheme. The husband intended the wife to place the 2017 Assets in discretionary trusts for the children to avoid inheritance tax. The wife never set up the trusts, and continued to hold the 2017 Assets in her sole name. The parties’ marriage broke down in 2020. By the time of the financial proceedings in 2022, the 2017 Assets were worth approximately £80 million.
Court of Appeal decision
The Court of Appeal decided the lower court judge had incorrectly made the transfer of title from the husband to the wife the determinative factor when assessing the character of the 2017 Assets, and that the source of the assets, rather than title, was the vital factor. The transfer did not change the character of the assets from property belonging to the husband (“non-matrimonial property”) to “matrimonial property”, described by the Supreme Court as “the fruits of the marriage partnership” or “product of the parties’ common endeavour”, which could be shared between the spouses.
Wife’s appeal to the Supreme Court
The wife argued that the Court of Appeal had placed too much weight on the husband being the primary source of the 2017 Assets. She contended that the transfer was effectively a gift to her.
The Supreme Court unanimously dismissed the appeal and confirmed that the majority of the 2017 Assets transferred during the marriage remained the husband’s own property (non-matrimonial property) that did not need to be shared between the spouses.
The Supreme Court clarified that only matrimonial property is subject to sharing. Equal sharing of matrimonial property is the appropriate and principled starting position, though this is subject to justified departures.
Non-matrimonial property cannot be shared, but it can be accessed to meet a party’s needs or to compensate a spouse who has “given up valuable opportunities by marrying”.
Source of wealth is key
Most significantly, the Supreme Court stressed that who holds the title to property does not determine whether that property is matrimonial property that can be shared, or non-matrimonial property. Rather, it is the source of wealth which is key: assets acquired before marriage or through inheritance or gift remain a party’s non-matrimonial property unless transformed or “matrimonialised” into matrimonial property over time. How would that transformation or “matrimonialisation” occur? The answer comes at paragraph 52:
“matrimonialisation rests on the parties, over time, treating the asset as shared”.
Shared intention = recipe for transformation
Source isn’t everything – the key ingredients are source combined with the parties’ shared intention. Shared intention is deduced from looking at how parties have been dealing with the assets over time – a sufficiently long period of time for such treatment to be regarded as settled. For example, have they used an inheritance to purchase a holiday property where the whole family has been staying for the last five summers? If so, that portion of the inheritance has probably been transformed into matrimonial property and falls to be shared. In Standish, the husband’s intention was always that the transfer to the wife was to mitigate IHT and benefit the children. His intention was not to benefit the wife, so matrimonialisation was not achieved, as the parties had no shared intention for any period of time, that the assets should become matrimonial property.
Moving forward, it will be essential to consider the full history of the asset in question to work out where the asset originated, how each party has been making use of that asset over time, and what this reveals of their intention. Assumptions cannot be made based on legal ownership and source alone.
Shared intention: fairer but less certain
The emphasis on intention brings to mind the well-known equitable maxim He who comes into equity must come with clean hands. As always in family law, fairness is fundamental. Would it have been fair here if the wife had benefitted from the transfer, knowing it had been effected to save tax and benefit the children? While “shared intention” taking centre stage seems fairer, it is less clear-cut and may well lead to parties litigating over who said what.
High-net-worth individuals will have to think about how to evidence their intention towards an asset and be ready to explain how their conduct over time relates to how that asset should be characterised. Introducing a subjective element like “shared intention” will generate more uncertainty than focussing purely on source, and there will be more scope for arguments over intention going forward.
What should HNW individuals do to avoid assets changing character?
What can be done to lessen that uncertainty? Maintain clear records of asset ownership, financial transactions, and clearly document the purpose of any intra-marital transfers. Keep your own property separate where you want to keep it characterised as non-matrimonial property, and ensure you are not using it in a way that could give rise to a shared intention for it to become matrimonial property – unless that is your objective! Examples could include using non-matrimonial assets to fund joint expenses or to make improvements to a family home.
Also be aware that transferring assets to your spouse or into joint names will not automatically transform those assets into matrimonial property, unless your intention to share the asset has been clearly recorded. Documentation can be vital in demonstrating the intended treatment of assets and preventing future disputes.
A boost to nuptial agreements
Entering into a pre-nuptial or post-nuptial agreement which clearly defines ownership and treatment of assets will greatly reduce uncertainty about the way assets are categorised. Following this judgment, it will be more difficult to invade non-matrimonial property, which should be kept in mind when agreeing definitions in nuptial agreements and assessing what may be “fair” in the future. Nuptial agreements can help to protect non-matrimonial assets and, although not legally binding, they offer a degree of certainty as to how the court would determine the division of assets should your relationship break down.
Schemes to mitigate tax
Perhaps most importantly for tax and estate planning, the judgment confirms that inter-spousal transfers will not automatically convert non-matrimonial property into matrimonial property, particularly if the purpose is tax planning. At paragraph 62, the Supreme Court states: “in the context of an intended scheme to mitigate the impact of inheritance tax, the intention is simply to save tax.” In such circumstances, compelling evidence will be required to show that the parties have treated the asset as shared between them.
Plan early, plan smart: the power of holistic legal advice
Fundamentally, the decision highlights how wealth planning should always be considered from a holistic perspective – with family and private client teams collaborating early on. Nuptial agreements, hand in hand with tax and estate planning measures, can bring clarity for high-net-worth individuals and reduce uncertainty in the event of future relationship breakdown. When working towards effective asset preservation, the enduring truth remains; early legal advice can help prevent many later wranglings.
“Standish has provided welcome clarity. The Supreme Court has stated that non-matrimonial property can never be shared on divorce, except to meet needs or compensation. The Supreme Court has also clarified the circumstances in which non-matrimonial property can become “matrimonialised”. This is helpful, as it enables us to advise clients how to avoid such a situation and to draft nuptial agreements to provide maximum protection” – Simon Blain, Partner.
Here at Forsters, our distinguished team of family law and wealth and estate planning specialists work in close collaboration to deliver a seamless, discreet, and first-class service to high-net-worth individuals and families. Our depth of expertise and commitment to excellence provide our clients with bespoke solutions of the highest standard.
