The division of assets can become a contentious issue in divorce proceedings, especially when trusts are involved. Trusts are typically set up to manage assets and protect wealth, which raises important questions during the breakdown of a marriage. Determining whether a trust can be considered marital property is a critical part of divorce settlements.
The role of trusts in asset protection
A trust is often established to safeguard assets for specific beneficiaries, so this structure can complicate divorce cases. Trusts may include various types, such as discretionary or fixed-interest trusts, and the court will carefully examine how they were set up. If a trust is viewed as being used to hide or protect assets from division, it may be scrutinised. Courts are increasingly likely to consider the purpose of the trust, its timing, and its usage during the marriage when making decisions.
A deed of trust is commonly employed in property ownership to outline each party’s share. In the case of divorce, the deed can help clarify ownership, especially if one spouse claims a greater interest in a shared property. It is crucial to understand that trusts and deeds are not immune to judicial review, meaning that judges can rule on how assets held in trust should be distributed fairly between the parties.
Court considerations and legal precedents
In recent legal cases, such as the one involving former Telegraph Media Group owner Frederick Barclay, the courts have shown that they are willing to investigate the details of trust arrangements. Trusts set up with the intention of concealing assets can lead to significant penalties for non-disclosure.
Courts also differentiate between trusts established before the marriage and those created during it. Pre-existing trusts may be harder to challenge, but any contribution to the trust during the marriage could make it subject to division. Legal advice from experts such as Parachute Law that are familiar with complex trust structures should be sought early.
Trusts are not straightforward in divorce proceedings and their treatment will depend on many factors, including the intentions behind their creation and how they were used during the marriage.