If you are getting divorced and your spouse benefits from a trust, you may be unsure what this means for your financial future. Understanding their interest in the trust, and how it could affect your financial settlement, is an important starting point. This guide explains the key questions to explore with your solicitor.

What is a trust?

A trust separates the legal ownership of assets from the beneficial interest in those assets.

Trust assets can include:

• Property
• Cash and investments
• Shares
• Business interests

The 'settlor' of a trust transfers the legal ownership of assets to one or more 'trustees' to hold and manage for the benefit of one or more 'beneficiaries'. The beneficiaries may receive income and/or capital from a trust, without legally owning the trust assets.

What does it mean if my spouse is the beneficiary of a trust?

If your spouse is the beneficiary of a trust, they must provide full and frank disclosure in relation to the trust as part of any financial remedy proceedings.

What does the court want to know?

The court will require sufficient information regarding the trust to establish whether it is a financial resource or a nuptial settlement. Where the trust is a financial resource, the court may take this into account when deciding how other assets should be divided to achieve a fair outcome for both parties. Where the trust is held to be a nuptial settlement, the court has the power to make orders to vary the trust as it sees fit. To answer these questions the court will need sufficient information regarding the trust and its beneficiaries.

What information should I ask my solicitor to obtain?

Your solicitor can help you identify the questions to ask and the documents needed to understand your spouse’s trust interests. Useful starting points include:

• How is your spouse connected to the trust, and how might they benefit?
• What do the trust documents say? This includes the trust deed and any later documents changing its terms or appointing assets.
• Is there a letter of wishes available to your spouse setting out how the person who created the trust would like it to be managed?
• Who are the current trustees?
• What payments, transfers or loans has your spouse received from the trust, and has it paid any expenses on their behalf?
• What correspondence has there been between the trustees and your spouse or their professional advisers?
• What further financial support is your spouse likely to receive from the trust in the foreseeable future?

With this information, you and your solicitor can gain a clearer understanding of the trust, your spouse’s interest in it and the financial support it may provide. Your solicitor can then explain what this could mean for your financial settlement.

Unsure what your spouse’s trust means for you?

When trusts form part of the financial picture, the right advice can make a real difference. JMW’s Family team can help you look beyond the trust documents to understand what your spouse’s interests could mean for your settlement. We bring clarity to complex financial arrangements, helping you ask the right questions, understand your options and move forward with confidence. For advice tailored to your circumstances, speak to our team in confidence.