When Is A Trust Not A Trust?

Trusts often crop up in divorce cases involving substantial wealth.

The family court has various ways of dealing with trusts. In some cases the trust will be what is known as a 'nuptial settlement' which is capable of variation by the court on divorce. The court has very wide powers of variation in appropriate cases. It can remove trustees or make provision for an applicant spouse from the trust fund. It is not, however, always possible to show the necessary 'nuptial' element to trigger the court's power to vary. In other instances the court may not be able to make an order directly against the trust but will see the spouse's interest in the trust as being a 'resource' to be taken into account. The court will need to assess the benefit that the beneficiary is likely to derive in the future from the trust. The court can use its powers to try and 'encourage' trustees to come to the aid of a beneficiary going through divorce proceedings.