Matrimonalisation of assets
We are seeing many more cases with second marriages or with people getting married later when they already have significant assets. It is often the case that during a marriage, with two incomes in a single property, a standard of living can be enjoyed which is not sustainable when there are two households.
During divorce
During divorce, assets which were once owned solely by one party before the marriage can be used to meet both people’s financial needs.
In divorce cases where there is more than enough money to meet a husband’s and wife’s needs, an analysis of what is matrimonial and non-matrimonial is often carried out. Non-matrimonial assets may be put to one side (ringfenced) and not shared. The sharing principle will then apply to the assets left as generated or acquired during the marriage.
Matrimonalisation
As part of this analysis of what is matrimonial and non-matrimonial, consideration is given to ‘Matrimonalisation’. This is when an asset that was once non-matrimonial i.e. owned solely by one party prior to marriage, becomes matrimonalised during the marriage because of the parties’ dealings with that asset. The asset is then subject to the sharing principle on divorce.
Court of Appeal guidance
A recent Court of Appeal decision in a farming case (Standish v Standish 2024) gives some guidance about the matrimonalisation of assets. In this case, the wife argued that assets acquired by the husband before the marriage (farm/farming business and investments) had been matrimonialised. Some shares relating to the farming business and investments owned by the husband before marrying his wife had been transferred from the sole name of the husband to the wife’s sole name. The wife argued that these assets had therefore been matrimonialised and that they should be shared equally. The first Court agreed with the wife.
However, the husband took the case to the Court of Appeal which held that the farming business and investments were indeed part of the husband’s pre-marital endeavour acquired by him long before marriage and should not be subject to the sharing principle. The assets had not been matrimonialised and as there was enough money in any event – the total assets being £132 million – to provide for the wife’s needs, the non-matrimonial assets should not be shared equally. The Court of Appeal determined that the source of the assets was critical in carrying out an analysis of what is matrimonial and non-matrimonial.
This case saw the Court of Appeal reduce the award to the wife by around £20,000,000. Obviously most cases do not involve even a fraction of the amount in dispute here. It is however it is a principle that can be applied to smaller money cases.
How we can help
If you would like further advice on the matrimonialisation of assets or any aspect of financial proceedings, please do not hesitate to get in touch with us on 0191 297 0011.
