Trusts and Asset Protection on Divorce

Planning how to protect significant wealth over the long term requires careful structuring and specialist legal advice. Trust planning can form a key part of that strategy for high net worth and ultra-high net worth families, family offices and trustees, particularly where the risk of a beneficiary’s divorce is a consideration.

At JMW, we advise high net worth individuals, ultra-high net worth families, family offices and professional advisers on the use of trusts as part of wider succession planning, estate planning and wealth management. Our work includes using trusts to protect assets in divorce, stress-testing existing trust structures, advising on prenuptial agreements and postnuptial agreements, and helping families understand how the family court may approach trust assets, separate assets and marital assets if a relationship later breaks down.

Effective wealth protection in divorce depends on responsible planning, consistent governance and a clear understanding of how complex asset structures operate in practice. The court will consider the reality of how assets are held, who benefits from them, whether one spouse has a beneficial interest, and whether certain assets could be treated as a financial resource within a future financial settlement.

Our approach is focused on clarity, control and long-term wealth preservation. By looking at how a trust is structured and how it has actually been operated over time, we can identify if the trust could be treated as a resource or a nuptial settlement within a future divorce.

Whether you are planning before marriage, reviewing an existing trust settlement, advising trustees, or considering how family wealth may be exposed if divorce or civil partnership dissolution arises, we can help you assess the risk and decide the right next step.

To discuss trust planning or protecting your assets from divorce, speak to our specialist team in confidence on 0345 872 6666, or complete our online enquiry form to arrange a call at a time that suits you.

How JMW Can Help With High Value Trust Services

Trust protection for high net worth and ultra-high net worth families requires a detailed understanding of how family law, trust law, estate planning and tax planning interact over time.

Our role is to help you structure and manage trusts in a way that supports long-term wealth preservation, while taking into account how the English court may approach trust assets in the context of a future divorce.

We work with high net worth individuals, UHNW families, trustees and professional advisers to provide clear, strategic guidance across all stages of the asset protection and trust planning process. Our support includes:

• Structuring trusts from the outset, advising on the most appropriate legal arrangements, including the use of discretionary trusts, to protect assets and retain appropriate levels of control
• Reviewing and stress-testing existing family trusts, assessing how trust assets have been managed historically and how they may be treated in divorce and financial proceedings
• Advising on the operation of trusts over time, including trustee decision-making, distributions to beneficiaries and the importance of maintaining clear separation between personal assets and trust assets
• Supporting trustees and settlors, particularly in complex or multi-generational structures, to ensure that trust arrangements remain aligned with the family’s long-term objectives

We regularly advise on complex asset protection structures involving business interests, property portfolios and international assets, including offshore trusts in jurisdictions such as Jersey, Guernsey and the Isle of Man. Our experience in high-value matters allows us to provide practical guidance that reflects both legal principles and the commercial realities of managing significant wealth.

JMW’s family law team works closely with our Private Wealth and Private Wealth Disputes specialists, providing a joined-up approach that is essential in this area. We also benefit from the input of a senior in-house barrister, offering early strategic insight on how trust structures may be viewed by the court on divorce.

We have extensive experience in trust litigation on divorce and are therefore able to advise not only on proactive trust planning, but also on how a trust structure may be tested or scrutinised if circumstances change.

This combined expertise allows us to deliver advice that is both technically robust and commercially focused, helping high and ultra-high net worth families protect assets effectively while maintaining flexibility for the future.

Meet Our Team

Our specialist team brings together expertise in family law, trusts, tax and private wealth to advise high net worth individuals and families on complex trust planning and asset protection strategies.

What Is a Trust?

A trust is a legal arrangement where assets are placed into a structure and held by the trustees for the benefit of the chosen beneficiaries. The settlor transfers legal ownership of the assets to the trustees, who then holds them subject to the terms of the trust.

By transferring legal ownership of those assets to the trustees, the structure separates control and benefit from personal ownership, which can play an important role in protecting assets as part of wider estate planning and succession planning.

In practice, trusts are often structured as discretionary trusts, where trustees have the authority to decide how and when trust assets are distributed among beneficiaries. This flexibility is a key feature, as it helps prevent any single beneficiary from having an absolute entitlement to the assets, which in turn can strengthen the overall level of asset protection.

For high net worth and ultra-high net worth individuals and families, trusts are often used to manage and preserve family wealth across generations. This may include holding property, investment portfolios or business interests within a structure designed to protect those assets from external risks, including potential divorce, bankruptcy or claims against a beneficiary, while also helping protect wealth for future generations.

Using a Trust to Protect Assets from Divorce

For many high and ultra high net worth families, a key reason for establishing a trust is to reduce the risk of wealth being exposed in the event of a future separation. When structured and managed appropriately, trusts can form an effective part of a wider strategy to protect assets and preserve family wealth.

However, upon divorce or separation the courts in England and Wales will look closely at how a trust operates in practice. Simply placing assets into a trust does not, in itself, guarantee protection. The way trustees exercise control, how distributions are made, and the overall governance of the structure will all influence how those assets are treated if divorce proceedings arise.

In our experience, the most effective trusts for asset protection are those that are:

• Carefully structured from the outset, with clear separation between different types of assets 
• Managed consistently over time, with trustees exercising independent control
• Aligned with wider estate planning, business succession planning and tax considerations

Taking a proactive approach is key. Addressing these issues early allows families to put in place structures that are more likely to withstand scrutiny and support a stable, long-term outcome.

We regularly advise on both establishing new trusts and reviewing existing structures where divorce risk is a concern. Visit our High Net Worth Divorce page for more information, or explore our related guidance on Trusts in Divorce for Beneficiaries and Advising Trustees in Divorce Proceedings to understand how these issues arise in practice.

Stress-Testing Existing Trust Structures

Many family trusts are established years, or even decades, before divorce risk is considered. As a result, structures that were originally designed for tax planning, estate planning or succession planning may not provide the level of asset protection intended if they are later scrutinised in divorce proceedings.

Regularly reviewing and “stress-testing” a trust allows you to assess how it would be viewed on divorce, based on how it has been operated over time. This is particularly important for established trusts, where patterns of distributions, trustee decision-making and beneficiary access may have evolved.

A structured review will typically consider:

• How the trust has been used in practice, including historic distributions to beneficiaries
• The level of control exercised by trustees, and whether this has remained independent
• Whether any assets have become closely linked to a beneficiary’s personal finances
• How the trust may be characterised if examined in future financial proceedings

Where potential vulnerabilities are identified, steps can often be taken to strengthen the structure and clarify how the trust is intended to operate going forward.

We advise trustees, settlors and family offices on reviewing existing trusts, to ensure that complex asset structures remain aligned with current objectives and are better positioned to withstand future scrutiny.

Prenuptial and Postnuptial Agreements as Asset Protection Tools

Trusts  are most effective as part of a coordinated approach to managing family wealth. In many cases, this includes the use of prenuptial agreements or postnuptial agreements alongside trust structures.

Prenuptial agreements and postnuptial agreements play an important role in asset protection, particularly where one spouse is a beneficiary of a family trust or where significant wealth has been built up before the marriage.

While a trust addresses the ownership and control of assets, a nuptial agreement sets out how those assets should be treated between spouses in the event of divorce. Used together, they can provide a more consistent and robust framework for protecting assets, particularly where trust interests are intended to remain within the family.

For example, a well-drafted nuptial agreement can:

• Record the parties' shared understanding that trust assets are non-matrimonial property
• Set expectations around how those assets will be treated in any future financial settlement
• Reduce the scope for dispute, particularly in complex or high-value cases

This combined approach helps align the legal structure of the trust with the intentions of the individuals involved, supporting a more predictable outcome if divorce proceedings arise.

Even though nuptial agreements are not legally binding, they can be used alongside trust structuring to clarify the status of trust assets, family wealth, business interests, inherited wealth, property and other separate assets. This can be particularly valuable where parents, trustees or family offices want to support a beneficiary during their lifetime while reducing the risk that wealth intended for future generations becomes a feature of a future divorce settlement.

The agreement must be carefully prepared. The court will consider a range of factors, including whether both parties received independent legal advice, whether there was full financial disclosure, whether the agreement was entered into freely, and whether the final outcome would be fair in the circumstances.

We advise on prenuptial and postnuptial agreements as part of a wider HNW and UHNW asset protection. This includes:

• Identifying which assets should be treated as family wealth, separate assets or non-marital property
• Advising on how trust interests and beneficial interests should be protected
• Coordinating the agreement with existing trust, estate planning and succession planning arrangements
• Working with trustees, private client advisers and tax specialists where needed
• Preparing agreements in a way that supports enforceability and reflects the family’s long-term objectives

Our focus is on creating clear, robust arrangements that sit properly alongside the wider wealth structure. For HNW and UHNW families, a well-considered nuptial agreement can provide clarity, reduce uncertainty and support a more controlled approach if divorce proceedings arise in the future.

Visit our prenuptial agreements and postnuptial agreements pages for further guidance.

Proactive Risk Management for HNW and UHNW Families

Asset protection is not only about the structures themselves. It also depends on how those structures are managed over time. A trust, nuptial agreement or wider wealth plan will be more robust where the underlying records, decision-making and financial arrangements are clear and consistent.

We advise HNW and UHNW families on practical steps that can reduce avoidable risk before divorce proceedings arise. This includes reviewing how family wealth is accessed, how trust distributions are recorded, how business interests are held, and whether personal finances have become too closely connected with trust assets or family assets.

Our advice often covers:

• Keeping trust assets, personal assets and marital assets clearly distinguished
• Maintaining clear records of trustee decisions and distributions
• Reviewing whether beneficiary expectations are consistent with the purpose of the trust settlement
• Considering how business interests, property and income may be viewed by the family court
• Identifying where further protection may be needed through a nuptial agreement or trust review
• Preparing families for the financial disclosure issues that may arise if divorce or civil partnership dissolution occurs later

This work is designed to help families avoid common pitfalls, including informal arrangements that create uncertainty, inconsistent treatment of assets, or incomplete records that make the position harder to explain. The aim is to create a clear, defensible framework that reflects the family’s intentions and supports responsible long-term wealth planning in the event of divorce.

We do not advise clients to hide assets or avoid disclosure. The more effective  approach is to plan early, document decisions properly and ensure that asset protection measures are aligned with the family’s wider objectives. This gives trustees, beneficiaries and advisers a clearer basis for decision-making in the context of divorce.

Working With Advisers and Trustees

Asset protection and divorce planning often sits alongside wider private wealth, tax planning, succession planning and estate planning advice. Our HNW trust and estate services are delivered collaboratively, and we regularly work with private client solicitors, trustees, wealth managers, financial advisers, accountants, family offices and other professional advisers to provide a family law perspective on wealth protection.

Our role is to help identify how family wealth may be treated if divorce proceedings or civil partnership dissolution arise in the future. This may include reviewing trust assets, beneficial interests, business interests, property structures, inheritance planning, nuptial agreements, complex assets, illiquid assets and existing family governance arrangements.

JMW’s multidisciplinary approach is particularly valuable in this area. It allows us to provide coordinated advice without disrupting existing adviser relationships. For example, where a private client solicitor is advising on a trust settlement or wider estate planning, we can provide focused input on how that structure may be viewed by the family court. Where trustees are reviewing distributions or beneficiary access, we can advise how this may be viewed if divorce proceedings arise in future. Where a family office is managing wealth across generations, we can help assess whether current arrangements support long-term asset protection.

For referrers, our involvement can be targeted and collaborative. We can advise on a specific family law issue, review a proposed structure from an asset protection perspective, or work as part of a broader advisory team. The objective is to give high and ultra-high net worth families, trustees and advisers a clearer view of risk, so decisions about protecting assets are made with the full legal and financial landscape in mind.

Why Choose JMW for High Net Worth Trust Services?

JMW advises high net worth individuals, ultra-high net worth families and trustees on complex asset protection and trust planning strategies, including trust structures involving assets of £100m to £1bn+. Our work sits at the intersection of family law, trusts and private wealth, allowing us to provide advice that reflects both legal risk and long-term wealth planning for complex wealth and complex estates.

Ruben Sinha is a recognised specialist in this area, with extensive experience advising on trusts in the context of divorce and asset protection. He works closely with JMW’s Private Wealth team, led by Joe Cobb, ensuring that every trust is structured with full consideration of tax planning, succession, asset protection and family governance.

Ruben leads JMW Signature, the firm’s specialist cross-practice service focused on delivering legal solutions for the largest and most complex families, bringing together family law, private client, trusts, tax, corporate, real estate and property expertise to help families preserve, grow and transfer wealth across generations, including advice on business continuity within wider succession and transfer planning.

JMW Signature enables the family team to work directly alongside specialist trust experts who understand the legal, commercial and personal dimensions of substantial family wealth. This gives clients access to joined-up HNW and UHNW trust services while allowing families and family offices to approach wealth protection in a coordinated way.

This cross-disciplinary approach, combined with input from our in-house barrister, allows us to deliver clear, strategic advice on even the most complex trust structures, including those involving offshore jurisdictions.

Q

Can a trust protect assets in a divorce?

A

A trust can help protect assets in the event of a potential divorce, but only if it is structured and managed correctly. The family court will consider how the trust operates in practice, including the level of control exercised by trustees and whether the beneficiary has access to the assets. A well-managed trust can reduce the likelihood of trust assets being treated as part of a financial settlement.

Q

Who can set up a trust to protect assets?

A

Trusts used to protect assets are typically established by high net worth and ultra-high net worth individuals, business owners or families looking to protect assets and manage wealth across future generations. A specialist solicitor will usually work alongside accountants or financial advisers to ensure the trust is structured appropriately and aligned with wider tax planning, estate planning and succession planning objectives.

Q

What are the tax implications of a trust?

A

There are important tax considerations when setting up and operating a trust, including Inheritance Tax (IHT), Capital Gains Tax and, in some cases, Income Tax. For example, transferring assets into a trust may trigger an immediate IHT charge depending on the value, and ongoing tax obligations may apply. Taking professional advice is essential to ensure the structure is tax efficient and compliant with relevant tax rules.

Q

Can I set up an offshore trust to protect assets?

A

Yes, offshore trusts are commonly used in jurisdictions such as Jersey, Guernsey and the Isle of Man in order to protect assets. These structures can form part of international wealth and estate planning, but they involve additional legal and tax considerations.

Coordinated advice is important to ensure compliance with UK tax rules and that the trust achieves its intended asset protection purpose.

Q

How much does a trust cost?

A

The cost of setting up a trust to protect assets will depend on the complexity of the assets involved, the structure required and whether offshore elements are included. Ongoing costs may also apply, including trustee fees, tax reporting and other administration. We recommend speaking to our team for tailored advice based on your circumstances.

Q

Do I need a solicitor to set up a trust to protect assets?

A

Yes, given the legal and tax complexity involved, working with an experienced trust and asset protection solicitor is essential. Proper structuring is key to ensuring the trust supports effective asset protection and does not create unintended tax consequences or legal issues in the future.