Marriage, divorce and family wealth: prenups, trusts, jurisdictions

How inherited and family wealth is treated when a marriage ends depends on where the divorce is heard. In England and Wales, the Supreme Court held in Standish v Standish in July 2025 that the sharing principle applies only to matrimonial property, so inherited or pre-marital wealth is not divided equally unless the couple has treated it as shared, although a spouse's needs may still be met from it. In the nine US community property states listed by the Internal Revenue Service, property received by gift or inheritance during the marriage is separate property. Prenuptial agreements have no statutory force in England and Wales, though they carry decisive weight if freely entered into and fair; in the US, a version of the uniform premarital agreement legislation has been adopted by 29 states. This article describes the rules and is not legal advice.

England and Wales: sharing, needs and matrimonialisation

English courts divide assets under the principles of needs, compensation and sharing, and Standish clarified the last of these. The husband had transferred investments worth about £80 million at trial into his wife's sole name in 2017 as part of a tax plan intended to place them in trusts for the children; the trusts were never set up. The Supreme Court, upholding the Court of Appeal, held that legal title does not decide whether an asset is matrimonial, that 75% of the assets were non-matrimonial and outside the sharing principle, and that a transfer between spouses made for tax reasons will not normally show the asset is being treated as shared, however long it lasts.

The judgment sets out what "matrimonialisation" requires: whether the parties, over time, have treated the asset as shared. Inherited capital kept separate, with its own accounts and records, is more likely to remain non-matrimonial. Inherited capital used to buy the family home or mixed into joint accounts is more likely to become matrimonial. A court can still award a share of non-matrimonial property to meet a spouse's reasonable needs; Standish did not change that.

Nuptial agreements in England and Wales

Prenuptial and postnuptial agreements have no statutory force in England and Wales, but since Radmacher v Granatino in 2010 the courts give effect to an agreement freely entered into with a full appreciation of its implications unless it would be unfair to hold the parties to it, as Mills & Reeve summarises. The Law Commission recommended binding "qualifying nuptial agreements" in 2014, with conditions including signature at least 28 days before the wedding, independent legal advice for both parties, financial disclosure, and a court power to override only to meet needs. That recommendation was never legislated. The Law Commission's scoping report of 18 December 2024 set out four models for reforming financial remedies, from codifying the current law to a full matrimonial property regime, and listed nuptial agreements as a candidate for discrete statutory reform; the Government had yet to choose a model at the time of writing.

The United States: community and separate property

The IRS's Publication 555 names Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin as community property states, and notes opt-in regimes in Alaska, Tennessee and South Dakota. In these states, property acquired during the marriage is generally owned equally by both spouses, but property received separately as a gift or inheritance during the marriage is separate property. The remaining states apply equitable distribution, under which courts divide marital property fairly rather than equally and generally also treat inheritances as separate. In both systems, separate property commonly becomes marital through commingling with joint funds or retitling into joint names.

A Michigan Senate Fiscal Agency analysis from June 2025 notes that a version of the Uniform Law Commission's premarital agreement act, first issued in 1983 and updated in 2012, has been adopted by 29 states. Under the 2012 version an agreement is unenforceable if consent was involuntary, if a party did not receive reasonable financial disclosure or waive it in a separate signed record, or if a party lacked reasonable access to independent counsel; a court may also decline to enforce a term that was unconscionable when signed.

Trusts and family structures

Trusts are used in both systems to hold inherited wealth outside a spouse's personal estate, and courts in both can look through them in some circumstances. Standish shows that legal form alone does not settle the question. Bank of America's 2024 Study of Wealthy Americans found 56% of wealthy US respondents had a trust and only 27% understood trusts very well.

What family offices do in practice

Bank of America's 2025 Family Office Study found that 45% of offices provide heirs with education on relationships, marriage and prenuptial agreements, and that a further 35% think it would be beneficial. Families that address the subject typically do so through the family constitution, with an expectation that beneficiaries sign an agreement before marriage, and through financial education for heirs. Keeping inherited capital in separately titled accounts with a clear record is the practice that matters in both jurisdictions.