In family law proceedings, disagreements often arise as to whether the assets of a particular Trust are matrimonial and open for division between the parties, or alternatively, whether they are non-matrimonial and should be excluded from the "matrimonial pot". There can also be disagreements about whether a particular Trust has been made with a true purpose in mind, or alternatively, as a means of defeating the other spouses' financial claims; perhaps where the assets held in a Trust would in other circumstances have been considered matrimonial.
The Court can be called upon to determine whether the assets of a particular Trust should be used to meet the needs of the parties or to accomplish equality and therefore fairness in lengthy marriages, or in marriages where the available assets may be inadequate to achieve a fair conclusion.
The Court has a duty under section 25 of the Matrimonial Causes Act to carefully consider all available assets and wealth of the parties as well as having varied and wide-ranging powers to make orders that provide for a fair outcome in each case. Effectively, what this means is that when the Court is confronted with a dispute involving a Trust, they often look past the intricate structures of a Trust that fail to survey the reality of the situation when deciding what assets are in fact available to the parties. Doing so allows the parties involved in the divorce to be provided with the fairest available outcome.
Originally published 22 August 2023.
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