If a trust may affect a financial settlement, it is important that the court has all the relevant information to determine how it may be dealt with.  Whilst both spouses have a duty to provide the court with full and frank financial disclosure, trustees are not bound in the same way.

If information is needed from trustees, it may seem natural to ask for them to be joined to the proceedings. But obtaining documents from trustees and making them parties to the case are different steps, with different requirements. Below, we explain when trustees may be required to provide information and when joining them to the proceedings may be appropriate.

Disclosure from a Trustee

Disclosure from trustees may be needed to establish what assets the trust holds and whether, a spouse has benefited from it or is likely to receive financial support from it. The spouses may not have access to the documents needed to answer those questions. Depending on what is relevant, trustees could provide the trust deed and any amendments, accounts or asset valuations, and records of distributions, loans or other payments to the spouse. Correspondence about requests for support may also help the court understand how the trustees have exercised their discretion.

The court cannot join a trustee to financial remedy proceedings solely to order them to disclose documents. However, where the trustees are physically in England and Wales, the court can require them to produce the relevant documents. This can be achieved through the making of  a disclosure order under Family Procedure Rule (FPR) 21.2 or a witness summons under FPR 24.2.

Joinder Applications

Where the involvement of the Trustees goes beyond providing disclosure the court can make them party to the proceedings, so they can be subject to the court’s orders. Either spouse or the trustees themselves can apply to be joined to the proceedings and in order to do so they must comply with the requirements of FPR 9.26B.

An application for joinder must be made on notice under Part 18 of the Family Procedure Rules. The application must be supported by clear evidence setting out the trustee’s interest/connection to the proceedings. The applicant for joinder must show either that there is:

• an existing matter in dispute that requires for its resolution the joinder of the new party; or
• a matter in dispute between a party and the proposed new party that is connected to the main matters in dispute between the parties and that it is desirable to resolve all the issues together.

Examples where joinder may be justified are where there are issues concerning:

• The validity of a trust (i.e. where a sham trust is alleged);
• Variation of a trust as a nuptial settlement and
• Enforcement of a final order regarding a trust.

If a trust may be relevant to your financial settlement, the right approach will depend on the type of trust, the information available and the issue the court needs to decide. Taking advice early can help you identify what disclosure to seek and whether there is a basis for asking the court to join the trustees to the proceedings.