What happens to a trust on divorce

W

WebBoard

Guest
From: Anonymous


Sorry for the anonymous post, but for personal reasons I don't want to say who I am.

My wife and I have a reasonable portfolio of property, some of which is held in a trust. There is a possibility that divorce is on the cards in the near future and I was wondering how best to deal with the property.

I would like to think that we can be mature enough that we can continue to invest as partners, but that remains to be seen. I don't want to sell the property, but what are the legalities of properties held in the family trust in this situation?

I hope someone can help ease my mind that I won't lose everything we have worked hard to achieve.

Thanks for your time

Anonymous
 
Last edited by a moderator:
Reply: 1
From: Duncan M


Its my understanding that the Family Court will look right through the trust and consider the assets as conventionally held joint assets.


Regards,

Duncan

 
Last edited by a moderator:
W

WebBoard

Guest
Reply: 1.1
From: Gordon Austin


This is probably a question best given to a solicitor who specialises in this area.

I would imagine that even if you decide to keep the trust going after divorce a problem could arise if either of you remarry. Depending on how the beneficiaries are defined in the deed this could cause complications if either party wants to start making trust distributions to new family members. I'm only guessing here.

Also try searching this site as I think this topic has been discussed previously.

Gordo
 
Last edited by a moderator:
Reply: 1.1.1
From: Dale Gatherum-Goss


Hi

Actually, nothing happens to a trust in a divorce.

As stated earlier, the family courts ignore the trust for their asset splitting purposes and just lump all of your assets together.

However, if you are the appointor of the trust (see your trust deed) then you have the power to appoint a new trustee which you control.

This means that you can continue to control the trust and the assets within it and decide which beneficiary you will allow to benefit from the trusts income each year.

Ex spouses remain a beneficiary and you have the unfettered right to ignore them.

New spouses become beneficiaries and you will have the right to favour them over the old one.

I agree with the earlier suggestion though and do talk to a good solicitor.

BTW, if you have children, the divorce is messy and unpleasant, and quite some assets, then you might also like to consider a Child Maintenance Trust as this will allow you to control the maintenance that you pay to the ex.

Something else to research perhaps . . .

I hope that all goes well and your relationship recovers.

Dale
 
Last edited by a moderator:
Reply: 1.1.1.1
From: Dale Gatherum-Goss


Oooops!

Sue, that isn't you is it? I'm sorry, but, I will be home sometime in November and we can talk it out then.

Damn, I knew there was a good reason why I didn't answer anonymous posts - now, I've just given MY wife all the answers.

Have fun guys and don't take me too seriously at this time of the morning.

Dale
 
Last edited by a moderator:
Reply: 1.1.1.2
From: Terry Mc


Dale,
how does the family court have power to
determine what happens to trust assets?
I understood that trust assets belonged to
the beneficiaries, and only assets held by
the married couple in their own or joint
names belong to them. For example, I
could be a trustee for the G-G Family
Trust (!); in the unlikely event of a divorce
could the court attach my assets?
What if one of the trustees were a trustee
company?
Terry Mc
 
Last edited by a moderator:
Reply: 1.1.1.2.1
From: Dale Gatherum-Goss


Hi Terry!

I am not entirely sure why the Family Court has such far reaching powers but abt 20 years or so ago they decided that they did have the ability to look through the structure at the underlying assets.

The assets within a typical F/T are held on behalf of the beneficiaries.

The courts disregard the trust, and the trustee, in their determination of what assets the couple have and how they will be split at the end of their marriage.

Sorry mate, no good news here.

Dale
 
Last edited by a moderator:
Reply: 1.1.1.2.1.1
From: Mark Laszczuk


Dale,
About six months ago, there was a very emotional discussion about assets distribution after a divorce, in which the original poster asked if he should be putting his properties into a trust to protect them before he got married. If someone went ahead with this strategy, how would the assets be treated after a divorce? Considering they were acquired before the marriage, then I assume they would not be considered in an asset split. Is this correct?

Mark
'no hat, some cattle'

P.S. I am not in this situation, nor do I ever intend to be. I plan on my (future) marriage to my fantastically wonderful partner to last forever. I'm just asking cause I'm curious as to the asset protection issue that is one of the main reasons for setting up a trust in the first place.
 
Last edited by a moderator:
Reply: 1.1.1.2.1.1.1
From: Dale Gatherum-Goss


Hiya Mark

Assets acquired before the marriage are often left out of the equation all together.

A premarital agreement is now probably the best option and one that people worried abt divorce should consider.

I'm with you. I plan on being happily married until the day that I die. And, should something happen and Sue and I go our own separate ways . . . she can have the lot and I will start again.

Have fun

Dale
 
Last edited by a moderator:
Top