Following the Supreme Court ruling last month in the highly publicised case of Standish v Standish, this article considers how assets, which were acquired before marriage, are dealt with upon divorce.
Standish v Standish
This high net-worth divorce case involved assets in the region of £132m and hearings at the High Court, Court of Appeal and ultimately, the Supreme Court.
In a nutshell, the husband challenged the High Court’s decision for the wife to receive some £45m, arguing that most of his money was earned before he and his wife began living together. The husband was successful and the Court of Appeal reduced the wife’s share by £20m. The Supreme Court upheld the Court of Appeal’s decision on the basis that most of the money was earned prior to the marriage, and the husband therefore was entitled to keep the largest share.
How might this affect future cases?
Whilst most divorcing couples will be unable to relate to the vast sums of money involved in this case, the Court’s approach and principles in relation to assets acquired pre-marriage are relevant.
It has been established in law that pre-marital wealth shall be treated as a contribution by one spouse (un-matched by the other) and the value of the contribution and how it was treated during the marriage will determine how it is treated upon divorce.
The Court will look at whether pre-acquired assets were kept specifically separate from other assets accumulated during the marriage and if only dividing the joint assets would meet the reasonable housing and living needs of both spouses. If dividing the joint assets alone would be sufficient, the Court will not just ignore the pre-acquired wealth and will instead treat it is as a resource available to that spouse.
The Court’s first priority however will be ensuring both spouses’ reasonable needs are met. If excluding assets acquired pre-marriage would leave one party at a disadvantage, then it would only be fair to add the appropriate percentage back into the “pot” to be distributed. Therefore, an argument for excluding pre-marital assets will only be particularly relevant when the assets of the marriage exceed the reasonable needs of both spouses.
How can we help?
At E J Coombs, we are experienced in dealing with the financial aspects of a divorce, including cases with pre-acquired assets.
It may be advisable to have a pre or post-nuptial agreement in place to cover the handling of pre-marital assets in the unfortunate event of a divorce in the future. We can also assist with preparing those types of agreements.
Please do not hesitate to contact us, using the links below, to arrange an initial appointment discuss your options further.
