Trusts and Divorce Solicitor

If you or your former partner has an interest in a trust, it can affect the financial settlement on divorce even where the trust assets are not legally owned by either of you. The court can consider whether trust funds are realistically available, how the trust has been used and whether further distributions are likely.

JMW’s trusts and divorce solicitors advise beneficiaries and non-beneficiary spouses on family trusts, discretionary trusts, inherited wealth and offshore structures. We help you understand how the trust is likely to be treated, what needs to be disclosed and how it may affect negotiations or financial remedy proceedings.

Our family law team includes more than 40 specialist lawyers across Manchester, Liverpool and London and is recognised by the Legal 500, Chambers & Partners and Spear’s 500. Where detailed trust advice is required, we work closely with JMW’s Private Wealth and Private Wealth Disputes specialists, giving you coordinated advice across both family law and trust law.

Whether you are concerned about protecting a family trust or believe your former partner has access to trust assets that should be reflected in the settlement, we will give you clear advice on your position and the options available.

To speak to our family law team in confidence, call 0345 872 6666 or complete our online enquiry form to arrange a call at a time that suits you.

How JMW Can Help With Trusts and Divorce

Where trust assets feature in a divorce, we first establish whether they are likely to affect the financial settlement. We then advise on disclosure, the evidence needed and how the trust should be addressed in negotiations or court proceedings.

Our family law team advises on:

• Assessing whether trust assets are likely to be treated as a financial resource
• Advising a beneficiary spouse on their trust interest and financial disclosure
• Advising a non-beneficiary spouse where their former partner has access to family wealth through a trust
• Reviewing discretionary trusts and the likelihood of future distributions
• Examining trust deeds and the history of distributions
• Determining whether a trust may qualify as a nuptial settlement
• Advising on family trusts containing inherited and intergenerational wealth
• Dealing with offshore trusts and international structures
• Working with trustees and their legal advisers
• Challenging assumptions about whether trust funds are genuinely available
• Negotiating a fair financial settlement
• Representing clients in financial remedy proceedings where agreement cannot be reached

JMW combines a large specialist family law team with in-house trust, private wealth and litigation expertise. This is particularly valuable where a divorce involves assets that cannot be understood through family law alone.

We advise clients nationally and internationally, from straightforward financial settlements to cases involving business interests, property portfolios, pensions, inherited wealth, trusts and overseas assets.

Our family lawyers are recognised by the Legal 500, Chambers & Partners and Spear's 500 for their work in family law and complex financial matters.

We have experience dealing with:

• Multimillion-pound family trusts
• Intergenerational asset transfers
• Agricultural property held within family structures
• Trust deed issues and variations
• Multi-party proceedings involving trustees and other interested parties
• Personal and corporate assets held through offshore trusts
• Trust settlements for children
• Discretionary and inherited trust interests

Partner Ruben Sinha has particular experience in complex divorce cases involving trusts and multi-generational wealth. Our family team also works closely with JMW's Private Wealth and Private Wealth Disputes specialists and can involve our in-house barrister, Abigail Bennett, where additional strategic input is required.

This joined-up approach allows us to address both the immediate divorce settlement and the wider trust structure without losing sight of the outcome you need.

Meet Our Team

Our family law team advises on trust interests ranging from straightforward family arrangements to complex discretionary, intergenerational and offshore structures.

What Is a Trust and Why Does It Matter in Divorce?

A trust separates legal ownership of assets from the right to benefit from them. Trustees hold and manage the assets, while one or more beneficiaries may receive income, capital or another financial benefit under the terms of the trust.

Trust assets can include:

• Property
• Cash and investments
• Shares
• Business interests
• Agricultural property
• Other family wealth

This distinction matters on divorce. A beneficiary may not be the legal owner of the trust assets, but their ability to benefit from those assets can still form part of the financial picture.

For example, a person may own relatively little in their own name but receive significant income from a family trust. The court can take that income into account when considering the resources available and what financial settlement is fair.

How Are Trust Assets Treated in Divorce Proceedings?

The court looks at whether trust assets are realistically available to the beneficiary. It does not automatically treat the whole trust as belonging to that person.

The treatment of a particular trust is fact-specific. The court may consider:

• The terms of the trust deed
• Who established the trust
• When it was established
• Why it was created
• Previous distributions to the beneficiary
• The value and frequency of those distributions
• Whether the beneficiary can request income, capital or loans
• The beneficiary's relationship with the trustees
• How independently the trustees make decisions
• Whether trust funds supported the family during the marriage
• Whether further support is likely in the foreseeable future

Where there is a clear history of support, the court may treat the trust as one of the beneficiary's financial resources. The resulting divorce settlement may then be structured on the basis that the beneficiary is likely to continue receiving support.

This is different from saying that the beneficiary legally owns all of the trust assets.

Do Trusts Have to Be Disclosed During Divorce?

Yes. A relevant beneficial interest in a trust forms part of the financial information that must be disclosed when resolving financial claims on divorce.

In contested financial remedy proceedings, both parties will usually provide detailed financial disclosure through Form E. The duty to provide financial disclosure continues until the final financial remedy order is made.

Trust-related disclosure may include:

• The nature of your beneficial interest
• Trust income
• Previous distributions
• The trust deed
• Trust accounts
• Letters of wishes
• Relevant correspondence with trustees

The documents required will depend on the circumstances. The court needs enough information to understand the trust and assess whether it represents a financial resource.

Are Trust Assets Protected From Divorce?

Trust assets are not automatically protected from divorce. The court will look at whether those assets are realistically available to the beneficiary and how the trust has operated during the relationship.

A trust may be less exposed where:

• Other family members established it independently
• It existed well before the marriage
• Distributions have been limited
• Trustees make genuinely independent decisions
• The beneficiary has little control over access to funds
• Trust assets have remained separate from the couple's finances

A trust may have greater influence on the settlement where:

• It has regularly funded the family's lifestyle
• The beneficiary receives substantial or predictable distributions
• Trust assets have effectively been used as family resources
• The beneficiary has significant influence over the trustees
• The trust was created in connection with the marriage

The key question is therefore not simply, "Are the assets in a trust?" It is whether the trust provides a genuine financial resource to one spouse.

For people planning how to protect family wealth before a relationship breakdown, JMW also advises on high net worth trust planning services.

How Are Discretionary Trusts Treated in Divorce?

A discretionary trust does not give a beneficiary an automatic right to a fixed share of the trust assets. The trustees decide whether to provide income, loans or capital and when those distributions should be made.

That does not prevent the family court from examining the trust. Instead, it asks whether the trustees are realistically likely to support the beneficiary.

Relevant evidence can include:

• Previous payments from the trust
• How often distributions have been made
• Previous requests for financial support
• Whether those requests were accepted
• The purpose of the trust
• The relationship between the beneficiary and trustees
• Whether trust funds have paid for housing or other family expenditure
• The trustees' approach to future distributions

A consistent pattern of support can make it more likely that the trust will be treated as a financial resource. Where trustees act independently and distributions are limited, the position may be different.

When choosing a divorce solicitor, it is therefore important to look for experience of both financial remedy proceedings and the practical operation of trusts.

When Can a Trust Be Treated as a Nuptial Settlement?

A trust can be treated as a nuptial settlement where it has a sufficient connection to the marriage. This matters because the court has wider powers over a nuptial settlement than over a trust.

A trust may be nuptial in character where it was created to provide continuing financial provision for one or both spouses, or for children of the family in connection with the marriage.

If a trust qualifies as a nuptial settlement, the court can consider varying the settlement as part of the financial settlement. This can affect how the resulting assets are divided between the parties (if at all).

The court will look at the substance of the arrangement rather than simply its label. The trust deed, its purpose and the way it has operated can all be relevant.

The powers available to the family court form part of the statutory framework under the Matrimonial Causes Act 1973.

Can the court take money directly from a trust?

Not simply because one spouse is a beneficiary. There is an important difference between treating a trust as a financial resource and exercising powers over a nuptial settlement.

Where the trust is a financial resource, the court may reflect expected trust support when deciding how other assets should be divided.

Where the trust qualifies as a nuptial settlement, the court may have wider powers to vary the arrangement itself.

Can a Family Trust or Inheritance Be Shared in Divorce?

Family trust and inherited assets are not automatically divided equally on divorce. Their treatment depends on their source, how they have been used and the financial circumstances of the parties.

A trust established by parents or grandparents may have been intended to preserve family wealth for future generations. That background can be important when deciding whether the assets should be distinguished from wealth built up during the marriage.

However, family wealth cannot simply be ignored where it has become an important financial resource. The court may look at whether trust funds have:

• Paid for the family home
• Met regular living costs
• Funded school fees or other major expenditure
• Provided income to one spouse
• Been distributed regularly during the marriage

The availability of other matrimonial assets is also important. A court dealing with a financial settlement must consider the parties' wider resources and needs rather than looking at the trust in isolation.

Is my spouse entitled to half of my trust or inheritance?

There is no automatic rule that a spouse receives half of the other person's trust interest or inherited assets.

The outcome depends on the circumstances. The court will consider the nature and source of the assets, how they were used during the marriage, each person's financial resources and what is required to achieve a fair outcome.

Can Trustees Become Involved in Divorce Proceedings?

Trustees can be asked to provide information where the trust is relevant to the financial settlement, and in some cases they can become directly involved in the proceedings.

Trustees have duties to the beneficiaries as a whole. Their interests are therefore not necessarily the same as those of the beneficiary who is getting divorced.

Trustees may need to deal with:

• Requests for the trust deed and accounts
• Questions about previous distributions
• Information about trustee decision-making
• Requests relating to future financial support
• Applications to join them to proceedings

JMW also advises trustees separately where a beneficiary's divorce places a trust under scrutiny. Our family lawyers work with trust specialists to help trustees manage disclosure and protect the wider beneficiary class.

How Are Offshore Trusts Treated in Divorce?

An offshore trust can still affect a divorce in England and Wales. Its location does not prevent the family court from considering whether the trust is a financial resource available to a beneficiary.

Offshore trusts can create additional questions around jurisdiction, disclosure and enforcement. The position of the trustees under the law of their home jurisdiction must also be considered.

We regularly deal with cross-border financial arrangements and work with trustees and overseas advisers where coordinated advice is required. For more information, visit our international family law page.

How Can You Protect Your Position if a Trust Is Involved?

Start by establishing what the trust actually provides and how it has operated. This gives you a reliable basis for disclosure, negotiation and any financial proceedings.

Depending on your position, we may recommend:

• Obtaining the trust deed and relevant supporting documents
• Identifying exactly what beneficial interest exists
• Reviewing previous distributions
• Establishing how independently the trustees operate
• Separating assumptions about access from evidence of actual access
• Coordinating with trustees and their advisers
• Considering the trust alongside all other matrimonial and non-matrimonial assets
• Making sure the final settlement is recorded in an appropriate financial order

If you are the beneficiary, clear evidence can help prevent the trust from being treated as more accessible than it really is.

If your former partner is the beneficiary, the same analysis can establish whether the trust provides resources that should properly be reflected in the financial settlement.

Can a Prenuptial Agreement Protect Trust Assets?

A prenuptial or postnuptial agreement can help clarify how trust interests should be treated if a marriage ends. It can be particularly useful where one spouse is already a beneficiary or expects to receive inherited family wealth.

A nuptial agreement can record:

• Which assets are intended to remain separate
• How trust interests should be treated
• The parties' intentions concerning inherited wealth
• How financial needs should be met if the marriage ends

A nuptial agreement does not remove the court's overall discretion, but a properly prepared agreement can carry significant weight.

For more information, visit our prenuptial agreements page.

Q

What happens if my parents created the trust before I married?

A

A family trust established by your parents before the marriage may be easier to distinguish from matrimonial assets, particularly where the trustees have remained independent and the trust has not routinely funded married life.

The court will still consider how the trust has operated and whether it represents a resource available to you.

Q

Do I need a specialist solicitor if a trust is involved?

A

Specialist advice is valuable where a trust could materially affect your financial settlement. The solicitor needs to understand both the family law principles and what the trust documents mean in practice.

JMW's family lawyers work with our Private Wealth specialists where a case requires detailed advice on the trust itself.