Director at
Family Law in Partnership
The short answer is that Standish affects things a bit – but it probably just confirms what a family solicitor would advise you to do anyway.
The longer answer is that highest court of the land has carried out one of its periodic reviews of how to deal with assets at the end of a marriage. Mr and Mrs Standish had considerable assets, much of it built up by Mr Standish before the marriage. They also had a plan to minimise inheritance tax for their children by putting a big slab of Mr Standish’s money in Mrs Standish’s name. When they split, questions were asked:
- Did she keep it?
- Was it shared?
- Did Mr Standish get it back?
The answer was C.
Mr Standish got the money back because it was considered to be his separate property and the intention was never that Mrs Standish should benefit from it. There was also enough marital property to meet Mrs Standish’s ongoing needs, such as accommodation and lifestyle.
Would this be the same if there were more modest assets to share?
If you don’t have such substantial assets, it is less likely to be as simple as dividing marital property (sometimes referred to as the marital pot). You may need to dip into each spouse’s separate property to meet needs. Probably the right way now is:
- First, to think carefully about whether an asset is one person’s “separate property”
- Secondly consider whether the assets have become shared – and this is all about intention – and now form part of the marital property
- Thirdly, you carry out a “needs” assessment, then adjust any division to ensure that children are provided for and that each spouse has a fair start on the road to independent living.
This approach makes clear that there is no simple “split it all 50:50”.
Looking at those 3 elements in turn:
1) Separate property
This is going to include:
- What one person owned before the marriage; or
- What they were given during the marriage, such as an inheritance
This is different from marital property, which is everything built up by or during the relationship.
It is usually possible to clearly identify property/ assets as one or the other – separate or marital. Although there are still uncertainties, for example where there have been personal injury awards or lottery wins.
2) Intention to share formerly separate assets
The second stage is all about intention. You don’t just look at whose name an asset is held in, you focus on the intention. If you went to Court, a Judge would consider “Do the dealings between you show that you intended to convert what was separate into something that was for you both?” If so, the separate assets are matrimonialised, which means they become joint assets and form part of the marital property. As such they are usually (but not inevitably) going to be shared equally.
This might happen over time because:
- What was separate property is not really so significant after the passage of time, because other assets have built up and the fact that this asset was separately brought in is not such a big deal
- These monies have been put into joint funds or otherwise scrambled together and over time that shows that they are intended to be relied on by both of you
- The money has been put into the family home and lived in over a period of time – and what asset is more central to the marriage partnership than that?
There may be other reasons and some situations will be harder to call. For example, what about a pension or even an ISA – these are not assets that you can put in joint names and there may be disagreement over what was said and what was intended during the relationship.
3) What is the needs assessment?
Needs is a bit like a picnic: you don’t focus so much on who brought what to the picnic, everyone needs to eat and if there is not enough to go around then you work a way to share what there is to make the best of the situation, usually prioritising younger children.
So here the marital property will be shared first, but if necessary the separate assets will also be shared. This can include future income.
What does this mean for the legal process?
Standish is simply telling us to be disciplined and take the steps in sequence to make sure that the right answer is reached. We need to:
- think about whether an asset is really one person’s separate property or marital property; then
- consider whether dividing just the marital property will ensure that children are provided for and that each spouse has a fair start towards independent life
And if not:
- dip into the separate assets to meet those needs.
Ultimately the decision in Standish is intended to enable a fairer division of assets on divorce, but some things remain less clear.
For example, imagine Jo who marries Les who has inherited a substantial 3 bed property. Otherwise, their resources are modest, they each earn well and at similar levels. Two years into the relationship, their marriage fails and they decide to divorce. Has the property that Les inherited become part of the marital pot? What share of it does Jo get?
If the main home is pretty much always marital property and if marital property is often divided equally, should Jo get half of the home after only 100 weeks of relationship that led to marriage and ended in divorce? We won’t know for sure until the guidance from the Supreme Court is put into practice in the day-to-day cases.
What does this mean for you?
I would suggest that when you are trying to find your solutions, it will almost always be worthwhile getting an “entitlements analysis” carried out by a legal professional. This will give you a clear indication of what you may each be entitled to and indeed, need, to move forward with your lives. Some of these tests don’t come naturally and unusual situations will generate unusual answers. You are not usually stuck with the analysis, but it will help to know it before you start trying to agree how you are going to go forward: no-one wants to regret their choices years down the road.
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About James Pirrie
James Pirrie is a Director of Family Law in Partnership, a highly regarded law firm based in London, which specialises in de-escalating conflict in family law. He is an Arbitrator, Family Solicitor and Mediator accredited in child-inclusive mediation.
James is driven to improve long term outcomes for families who are experiencing separation or divorce. He is credited with introducing collaborative law to the UK and with changing how children’s needs are addressed during family breakdown through the Parenting after Parting initiative.