Trusts and divorce

The way different types of trust are treated on divorce varies significantly, so it's essential get expert advice whether you're involved as one of the divorcing couple, a trustee or a beneficiary.

Family trusts are usually established to pass wealth down the generations and/or to save tax. There are many different types of trust and how they are dealt with on divorce can vary greatly. To add to the complexity, there are often competing interests relating to trusts that can affect not only the divorcing couple but the wider family including future generations. All these factors need to be taken into consideration. 

The orders a court can make on a divorce will depend on the nature of the particular trust. If you or your partner is a beneficiary, or potential beneficiary, the trust interest will need to be disclosed, even if there's an argument that its value shouldn't be shared in the same way as other assets. Often beneficiaries run into difficulties with the trustees of the trust about their entitlement to information and documentation. 

Getting the right information and advice is essential. Key issues include whether the trust is "nuptial" or "non-nuptial" (as the court can make orders directly against nuptial trusts) and whether it's onshore or offshore (which has a bearing on both procedure and enforcement).  

Our family lawyers are part of one of the largest and most highly regarded private wealth teams in the country, advising individuals and families on establishing and managing all kinds of onshore and offshore trusts. This means that whether you're facing a divorce yourself, a trustee concerned about the implications of family breakdown or you're looking at trusts alongside a prenup to protect family wealth for the future, you'll have access to the very best joined up advice.

Our family team understands how trusts work and our expertise and experience enables us to find the best way forward. Our focus is always on reaching an agreed outcome, even where there are court proceedings. A couple of examples of our work illustrate this:

In the  High Court case of Tchenquiz-Imerman v Imerman, we represented the adult children beneficiaries of a trust set up by their father  so that their views were heard when it came to the financial settlement between him and his wife. There were issues around the disclosure of documentation from Jersey proceedings. Our advice helped ensure that the children's interests were protected when the overall financial settlement was finalised by agreement.

We dealt with complex arguments in a divorce case involving a trust set up for tax purposes which, on the face of it, excluded our client and his wife from having any benefit. She was arguing that the trust provisions could be sidestepped to increase her financial settlement. We successfully negotiated an order by consent which allowed the family to plan effectively for the future.

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