'Matrimonialisation' of assets in divorce

Matrimonialisation refers to the process of a non-matrimonial asset becoming ‘matrimonalised’ during the parties’ marriage. As such, the asset will be subject to the sharing principle.  

Whether the asset becomes matrimonialised is dependent on the parties’ treatment of it. For example, if both parties relied on the asset throughout the marriage to support their needs, this may indicate that it had become matrimonialised. Where non-matrimonial assets become ‘mingled’ with matrimonial assets, which tends to happen in longer marriages, then this will also suggest that they have become matrimonialised. The importance of the source of the asset will generally diminish over time.  

The case of WX v HX (Treatment of Matrimonial and Non-Matrimonial Property) [2021] EWHC 241 (Fam) highlights how the extent to which premarital assets are ‘mingled’ will determine whether they are non-matrimonial. In this case, one of the major issues was whether the wife’s trust fund, which she brought into the marriage, was non-matrimonial. The trust fund was large (worth £14m), and due to the husband’s experience as an investment banker he managed the trust on her behalf. He claimed that this had matrimonialised it. The court held that the trust was a non-matrimonial asset as it had not been mingled with matrimonial assets, remaining solely in the wife’s name and preserved as a separate asset throughout the marriage. Therefore, the husband’s management of the trust was not sufficient to matrimonialise it.  

The recent landmark case Standish v Standish [2024] EWCA Civ 567 has provided further clarity on the court’s approach to matrimonialisation. The husband had significant premarital wealth when the parties married. Towards the end of the marriage, he transferred £80 million in assets to his wife in a tax-planning exercise. His intention was that she would then transfer the assets into a trust for the benefit of their children. The wife failed to do so before issuing divorce proceedings. The central issue was whether the husband’s transfer of the assets had the effect of matrimonialising them, as the wife claimed. The husband argued that they were premarital assets and thus non-matrimonial. He disputed the wife’s argument that the transfer had matrimonialised them, arguing that the source of the assets was most important, rather than legal ownership. The Court of Appeal agreed with this assertion, demonstrating that a transfer of title is not sufficient to prove matrimonialisation.  

If you are considering or going through a divorce and are concerned about the division of assets, contact Vardags today for a free initial consultation with one of our expert divorce solicitors.  

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