The good and not so good implications of Standish for farming families upon divorce

On 2 July 2025 the Supreme Court handed down its judgment in the long running case, Standish v Standish, upholding the Court of Appeal decision and dismissing Mrs Standish’s appeal. The decision highlighted themes that will have a particular bearing on farming families and family run companies by:

• advancing the legal principle of “sharing” matrimonial assets on divorce,
• confirming that the sharing principle does not apply to non-matrimonial assets, and
• providing new guidance as to the circumstances in which non-matrimonial assets may become matrimonial and therefore subject to the sharing principle between a couple on divorce.

The sharing principle applies to matrimonial property/assets and should normally be on an equal basis. While there can be justified departures from the 50/50 principle, equal sharing is the appropriate starting position. The sharing principle does not apply to non-matrimonial property/assets.

What is and what is not matrimonial property?

Each case is fact specific – Standish involved a transfer of £80m in assets between spouses. The husband argued the transfer was for the specific purpose of tax planning, for the benefit of the children, and it was not intended to benefit his now ex wife. It was held that the asset was not matrimonial and was not to be shared with the wife upon divorce. The asset had not been “matrimonialised”. The wife received a £25m share of what was matrimonial property.

This is some comfort to those wanting to plan and move assets for tax planning purposes, particularly Inheritance Tax, or for example a school fees fund, but recording the intention and keeping the asset separate and therefore non matrimonial will be a key factor to protect it on any future divorce.

Also, while helpful guidance on what is and is not matrimonial property and the clear statement that there is no legal right to share property found to be non-matrimonial,

non-matrimonial assets could still be subject to a claim from a spouse on divorce under other principles of “need” and “compensation”. This could typically be in lower value cases where sharing matrimonial property is insufficient to meet the needs of the parties and children.

Matrimonialisation of assets

The court went on to consider how an asset that started as non-matrimonial could over time be matrimonialised” and therefore subject to the principle of sharing. It will be important to look at how the parties have dealt with the non-matrimonial assets and whether, over time, they have treated the asset as shared. There should be intention by the contributor to share non-marital property. Legal title to the asset is not a determinative factor – it could be in joint names or in one spouse’s name.

Family farms

In family farms parents often gift land or property to a child and the child uses that asset with their spouse with an intention that it becomes their family farm, their family home, their family holiday lets, or their family farm shops, and so on, but it becomes “shared”. A gifted building that is renovated and improved can become a family home and matrimonial. Those assets over time can become matrimonial and can be shared on divorce (the starting point being 50/50). There could however be claims to depart from 50/50 based on need or unmatched contributions.

This leaves farms with difficult issues as to how to meet the claims and needs of spouses on divorce, balancing the wish to keep farms intact, illiquid assets and considering how to plan for future tax payments. Compromises may involve selling part of property to third parties or transferring parts to a spouse. Trusts may also be useful in trying to keep assets as intact as possible.

How to avoid risks and uncertainty

• When planning transactions and transfer of assets, be clear about intentions and document them. Consider written legal agreements.
• Have early conversations. Take advice, be it on tax, legal, accountancy, planning, partnership or shareholder agreements.
• Keep assets separate if the intention of a transfer is that they are not for the benefit of the recipient.
• Pre-nuptial Agreements before getting married can provide considerable protection from sharing matrimonial property on divorce. If the marriage has already taken place Post-Nuptial Agreements offer similar protection. Both agreements need some careful thought – the terms must be fair and meet “need”, and consideration should be given to financial disclosure between the parties and the opportunity for each party to take independent legal advice.
• Consider other life events such as death, incapacity to deal with assets (physical or mental) and bankruptcy. Prepare with Wills and Lasting Powers of Attorney.

While the case of Standish deals with married couples and divorce, the law in relation to couples who live together and are not married is the subject of much legal and policy debate and there are calls for a change in the law. So, be aware that in future, the rights of non-married parties in a relationship may be enhanced.