In the context of a divorce trust interests have to be disclosed and any resulting resources taken into account so early advice is key in this complex area.
There are a variety of types of trust, some of which make express provision for the intended beneficiaries, but often there is significant scope for argument as to the value of a person’s beneficial interest in a trust when the provision is at the discretion of the trustees.
With a discretionary trust the court will look back at the history of distributions to assess the extent of likely future provision and will want to see all the trust documents, accounts and letters of wishes of the settlor to make that assessment. The court may then encourage trustees to make provision available to a divorcing trust beneficiary so that financial provision for their spouse which is awarded in the divorce can be funded.
Specialist legal advice
We specialise in this area and can advise a spouse beneficiary or trustee (if they are called upon to provide information to the court when a beneficiary gets divorced) on the level of disclosure required and the implications. Some trusts are offshore and we have contacts in foreign jurisdictions who can assist where necessary.
In certain circumstances (where a trust is deemed to be nuptial) trusts or structures can be varied by the court within financial proceedings in the context of a divorce and its powers are wide: to the extent that beneficiaries can be changed to provide for a spouse and trust resources allocated to them.
In that situation the other beneficiaries of the trust would need to be represented in the divorce to ensure their interests are taken into account.
Benefits of a full service law firm
Not only do our clients have the best family law team in Devon and Cornwall as ranked by Chambers and The Legal 500, the two leading independent legal guides. They also have access to our inheritance and trusts team who can advise on the implications for divorcees who are trust beneficiaries, trustees who are called upon to provide information to the court and to other beneficiaries of an affected trust.