Apparently, 'what's yours is mine' does not apply to gifted assets, who knew? In a landmark decision that could reshape financial proceedings on divorce, the UK Supreme Court has handed down judgment in Standish v Standish, clarifying how courts should treat gifts and inherited assets acquired prior to marriage.
This ruling is now a key authority on the classification of non-matrimonial property, with important consequences for divorcing couples and anyone considering pre- or post-nuptial financial planning. Turns out, 'what's mine is yours' has a few legal caveats.
Background: The Dispute
The case centred around a high-net-worth divorce in which one party had received substantial gifts from family members prior to the marriage. These assets, which were used to acquire property and investments, were later disputed in the financial settlement.
The trial judge had originally included the gifted assets in the matrimonial pot, citing intermingling and the long duration of the marriage. The Court of Appeal upheld this view.
However, the Supreme Court disagreed.
The Supreme Court clarified that:
- Assets received as gifts or inheritances prior to marriage are presumed to be non-matrimonial, even if they increased in value during the marriage.
- These assets should not automatically be subject to equal division, unless they have been deliberately merged into the couple's shared finances or used to fund the family's standard of living.
- The burden lies on the party seeking to exclude the asset to show it has retained its non-matrimonial character.
In Standish, the gifted assets were kept largely separate and not used as joint funds. The Court ruled that they should not be included in the matrimonial pot for division.
What This Means for Clients
This decision reaffirms a more structured approach to dividing assets on divorce, particularly where family gifts or inheritance are involved. It highlights the importance of:
- Asset ring-fencing: Keeping gifted or inherited property separate from shared marital assets.
- Clear financial records: Demonstrating the source and treatment of assets over time.
- Prenuptial or postnuptial agreements: These can be powerful tools to set expectations around gifts and inheritance.
Our Perspective
At Duncan Lewis Solicitors, we welcome the clarity that Standish v Standish brings to an area that has long created uncertainty in family law.
Clients with complex family wealth, intergenerational gifting, or business assets should take this decision into account when planning for marriage or dealing with separation. Likewise, it offers reassurance to parents and relatives who wish to gift property without fear it will be lost in future divorce proceedings.
Need Advice?
If you're going through a divorce or planning how to protect your assets, our specialist Family Law team is here to help. We offer clear, pragmatic advice on:
- Pre- and postnuptial agreements
- Divorce and financial settlements
- Protecting inherited wealth and gifts
Contact us today to speak to a member of the team in confidence.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
