The rules of division
If you're getting divorced, take note of a new change in the law, counsels Paul Lewis
Only rich people can afford to appeal all the way to the Supreme Court to settle disputes of how their money should be divided on divorce. Clive and Anna Standish did just that in a dispute over £80 million, but the binding decision in their case has clarified the law for everyone who divorces or ends a civil partnership from now on. It affects couples where one or both has brought assets to the marriage or inherits assets during it, which is of course more common where it is a second (or indeed third) marriage that is being dissolved. Silver splitters, as older divorcing couples are often called, may have married later in life and come to the union with their own savings, investments and property. The question is how should those be split if they divorce?
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The starting point in English law is that on divorce the assets of the couple are spilt 50:50 – the ‘sharing principle’. For example, the value of the marital home is normally split equally and it should be the same with the value of any pension entitlement at the date of the divorce, though many individuals and lawyers seem to ignore that rule. Joint savings or investments, too, should be halved. That principle can then be adapted to ensure that the needs of any children and of both parties are met as far as possible.
But if one party brings a major asset to the marriage this binding ruling confirms that a couple should consider to what extent it has become jointly owned property – what is now called ‘matrimonialisation’. For example a home that is lived in together or savings on which both feel able to draw have been matrimonialised. The Supreme Court held that the sharing principle did not apply to assets which had not been matrimonialised and they could be kept by the person who originally owned them or shared only to the extent they had become jointly owned.
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The judgement in the case – Standish v Standish UKSC/2024/0089 – can be found at supremecourt.uk. If you are heading for a divorce, make sure your lawyers take it into account. This decision extends to Wales, but not to Scotland, where things are very different, nor to Northern Ireland.