Trusts have traditionally been used as the means of managing family wealth and assets. They are useful in terms of preserving assets and are good tax planning tools. Our Estates Team advises on many significant family trusts. We also act for many people who are beneficiaries under trust. We also have experience of advising trustees upon the impact of a divorce in relation to the trusts and where beneficiaries are going through a divorce.
It is a common mistake to think that a trust, particularly a discretionary trust, is irrelevant in divorce proceedings. Trusts separate ownership and control of assets from their benefits so beneficiaries often view them as irrelevant because the assets are not theirs.
The court will however want to understand the trust and what has happened with it historically. It is a resource within the marriage. If it is deemed a nuptial settlement the court can vary the trust such as moving assets out of it or introducing a new beneficiary.
If it is not a nuptial settlement the court cannot deal with the assets in the same manner but may use its discretion to make assumptions about how the trustees will assist the beneficiary in the future. This in turn can impact upon how the court deals with the other matrimonial assets.
Trusts within divorce proceedings need careful consideration and can raise complex issues. We are familiar with them and their treatment by the court. You should seek advice if you are a beneficiary under a trust and are experiencing relationship difficulties.