Trusts

The court must consider the financial resources the parties have or are likely to have in the foreseeable future under section 25(2)(a) of the Matrimonial Causes Act 1973 (MCA 1973) and Schedule 5, Part 5 to the Civil Partnership Act 2004 (CPA 2004). If a party to a marriage or civil partnership is a beneficiary or potential beneficiary under a trust, their interest may be regarded as a financial resource. The court's approach will depend on the nature of their interest and the broader circumstances of the case. A trust may be varied if it is a nuptial settlement—‘relevant settlement’ is the terminology adopted by CPA 2004, Sch 5, Pt 5. Questions of trusts or property law may also need to be determined within financial remedy proceedings.

The court has three main methods of approaching trusts within an application for a financial remedy:

  1. treating trust income or assets as a resource available to either party (or declining to do so)—see: Introduction to trusts within financial proceedings — Trusts as a financial resource

  2. exercising its power to vary a nuptial settlement under

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Monumental Supreme Court decision on matrimonialisation and sharing principle (Standish v Standish)

Family analysis: The Supreme Court’s much-anticipated judgment confirms unequivocally that the sharing principle does not apply to non-matrimonial property. Sharing of matrimonial property will usually be 50:50, though there may be a departure from equal division where justified. Non-matrimonial property typically has either a pre-marital origin, or, where it is received during the currency of the marriage, an external source (eg an inheritance). Title to an asset is expressly not determinative as to whether that asset is or is not matrimonial. Though non-matrimonial property may become matrimonial (ie ‘matrimonialisation’) this will depend on how the parties have been dealing with the asset and whether, over time, they have been treating that asset as shared between them. The concept of matrimonialisation is to be applied neither ‘widely’ nor ‘narrowly’ (contrary to what the Court of Appeal had held)—again, the enquiry should focus on how the parties have dealt with the asset. Where an asset is transferred from one spouse to another with the intention to save tax (as had occurred in the case), this will not normally show that the asset is being treated as shared. The Supreme Court ultimately upheld the decision to dismiss the wife’s appeal, though it did not wholly agree with the Court of Appeal’s reasoning. Pursuant to that decision (made on the sharing basis) the wife would be provided with circa £25m of the total assets figure of circa £132.6m, being half of the matrimonial assets figure of £50.48m. David Wilkinson, solicitor at Slater Heelis, considers the judgment.

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