When dividing assets during a divorce, the court will look to ensure that each of the party’s needs are met. If the parties’ needs can be comfortably met from the asset base the court will then look at how the parties should share in the remaining assets. The court determines this based on several factors including consideration of who owns the asset and how the assets were acquired.

As part of the process, the court will seek to determine whether the asset is a matrimonial or non-matrimonial asset. A matrimonial asset is an asset built up or acquired during the marriage. Usually, parties have equal claim to these assets. Non-matrimonial assets are assets brought into the marriage by one party only and if needs can be met by matrimonial assets, non-matrimonial assets may not be subject to sharing.

It is possible for non-matrimonial assets to become matrimonial assets through a process that has been coined “matrimonialisation”.

When does “matrimonialisation” occur?

The transition of a non-matrimonial asset into a matrimonial asset is often down to how the asset has been treated during the marriage. For example, if one parties inheritance is used to purchase a property, and the parties have subsequently lived in that property together, the property may then be considered matrimonial and would potentially be open to sharing.

Whilst the concept of “matrimonialisation” may seem straightforward, it is highly fact specific and very discretionary. The recent case of Standish v Standish has provided helpful guidance on when “matrimonialisation” occurs.

Standish v Standish [2024] EWCA Civ 567

In this case, the couple’s wealth totalled approximately £132m. In 2017, the Husband transferred approximately £77m worth of the asset base into the Wife’s sole name for tax reasons.

Upon divorce, the Wife argued that this transfer meant the assets had been “matrimonialised” and thus, should be shared equally between the parties. The court at first instance agreed with the Wife in principle, but ordered that the £77m should be split on a 60:40 basis in favour of the Husband. This resulted in the Wife receiving a settlement of £45m. The Husband appealed this decision.

The Court of Appeal stated that “matrimonialisation” should be applied narrowly to avoid an unfair division of assets. The court ordered that the Wife’s £45m should be reduced to £25m to reflect the fact that the assets were built up prior to the marriage by the Husband. The court considered that this was a fair outcome.

This case illustrates the importance of how an asset came into the family rather than whose name the asset is registered in.

How do I protect my non-matrimonial assets?

It is possible to ring fence non-matrimonial assets with a view to protecting them in the event of divorce by entering into a Pre-Nuptial agreement. A Prenup is a legal contract made prior to a marriage with the aim of defining asset division upon divorce. Find out more here

Similarly, parties can enter into a Postnup after marriage. A PostNup may reflect the terms of a Prenup or stand as a document in itself. Couples may opt for a PostNup if they did not enter into a PreNup or if their financial circumstances have changed post marriage.