Trusts in Divorce: Solicitors for Beneficiaries

If you are going through divorce proceedings, and are a beneficiary of a family trust, your trust assets are likely already being examined as part of the process. In many cases, the other non-beneficiary spouse will argue that the trust should be treated as a financial resource, and/or as a nuptial settlement capable of being varied by the court.

This is a complex and high-stakes area. The court in England and Wales will not simply look at who has legal ownership of the assets. Instead, it will assess how the trust has operated in practice, whether you have previously benefited from the trust, and whether further distributions are likely. This can bring substantial family wealth into the equation, even where it is held within long-established trust arrangements.

At JMW, we advise beneficiary spouses on trusts in high and ultra-high net worth divorce, including cases involving discretionary trusts, offshore structures and multi-generational wealth. We provide clear, strategic advice at an early stage to shape how trust assets are presented and treated within financial remedy proceedings.

If your trust interests are in issue in divorce proceedings, speak to our specialist team in confidence. Call 0345 872 6666 or complete our online enquiry form to arrange a consultation.

“If trust assets are involved in your divorce, it could shape the entire financial settlement. Getting clear advice at the outset is critical to managing that risk.” - Ruben Sinha, Partner

Meet the Team

Our specialist team advises beneficiaries or their spouses on complex trusts in divorce cases, combining expertise in family law, private wealth and cross-border matters.

How Are Trust Assets Treated in Divorce Proceedings?

In cases involving trusts in high and ultra high net worth divorce, the court in England and Wales has broad discretion when determining a financial settlement, including how it approaches trust assets. The key question is not simply who legally owns the assets, but whether those assets are realistically available to the divorcing beneficiary spouse.

The treatment of trust assets in divorce will depend on the reality of how the trust has operated, including historic distributions, trustee decision-making and the beneficiary’s level of influence or expectation.

In practice, the court will consider:

• Whether the beneficiaries have previously benefited from the trust and to what extent.
• The pattern of trust distributions (if any)
• If the trustees are likely to provide financial support to beneficiaries in the foreseeable future

Where this applies, the court may structure the financial settlement on the basis that the trust will continue to support the beneficiary, even though the assets are not legally owned by them. This is a form of judicial encouragement. 

In some cases, the court will go further and consider whether the trust is a nuptial settlement. If so, it has the power to vary the trust, including adding or removing beneficiaries, creating sub-trusts or ordering payments to a non-beneficiary. 

The court will also look closely at how the trust has operated in reality. This includes:

• The terms of the trust deed
• The contents of any letters of wishes
• The level of influence the beneficiary has over trustees
• Whether trust funds have supported the family’s lifestyle
• The distinction between matrimonial assets and wider family wealth

Importantly, trustees can be drawn into the process. They may be required to provide financial disclosure, produce trust documents and, in some cases, be joined to financial remedy proceedings.

Both offshore and onshore trusts add significant complexity to financial remedy proceedings. Understanding how your trust is likely to be treated at an early stage is critical to managing risk and shaping the overall approach to your financial proceedings. Learn more by reading our related page on Advising Trustees in Divorce Proceedings.

Are Assets in a Trust Protected from Divorce?

Trust assets are not automatically protected in divorce proceedings.

While trusts are often used to protect assets and preserve family wealth, the court will focus on whether those assets are realistically available to the beneficiary spouse, rather than who legally owns them.

Protection is typically stronger where:

• The trust was established by family members, not the beneficiary
• It was set up well before the marriage
• There have been limited distributions
• The beneficiary has no control over trustees

Protection is weaker where:

• Trust funds have supported the couple’s lifestyle
• The trust has been used as part of shared finances
• The beneficiary has influence over how assets are managed

In these circumstances, the court may treat the trust as a financial resource, which can significantly increase the overall financial settlement.

The court takes a pragmatic approach, looking beyond the legal structure to determine how the trust operates in practice. Understanding this early - and taking specialist legal advice - is critical to protecting your position in financial proceedings. For proactive planning, see our Trusts and Asset Protection on Divorce page.

How Are Discretionary Trusts Treated in Divorce?

In divorce cases involving discretionary trusts, the absence of a fixed entitlement can be helpful, but it does not prevent the court from examining the trust closely. Discretionary trusts are commonly used to protect assets, particularly in high-value family structures. However, in divorce proceedings, they are not immune from scrutiny.

The key issue is whether the court considers trust assets a financial resource available to you. This will depend on how the trust operates in practice.

In particular, the court will look at:

• Whether you have previously benefited from the trust
• The pattern of trust distributions
• The likelihood of further support in the foreseeable future

Where there is a clear expectation that trustees will provide financial support, the trust is more likely to be relevant.

By contrast, where trustees act independently and distributions are limited, the trust may be less exposed.

The distinction is often finely balanced. Taking early, specialist legal advice is key to understanding how your trust will be treated and how best to position it within your financial proceedings.

When Can a Trust Be Treated as a Nuptial Settlement?

A key risk when trusts are involved on divorce is whether the court treats a trust as a nuptial settlement. If it does, it has the power to intervene directly and vary the trusts as part of any financial settlement. This can significantly increase exposure.

In practical terms, this may involve:

• Requiring trust assets to be applied for the benefit of the other spouse
• Creating sub-trusts
• Adding or removing beneficiaries 

A trust is more likely to be treated as a nuptial settlement where there is a connection to the marriage  and it has been used to support one or both spouses during the marriage. This means that even long-established family trusts can fall within this scope if they have become part of the couple’s financial arrangements.

The distinction is often finely balanced, but the consequences are significant. If a trust is treated as a nuptial settlement, it can be brought much more directly into the matrimonial pot. Prenuptial agreements can be used alongside trust arrangements to help clarify how trust interests should be treated if a marriage ends.

We advise beneficiary spouses on how to assess this risk early and position the trust appropriately within financial remedy proceedings, helping to limit exposure and protect long-term family wealth.

Offshore Trusts and Divorce

Offshore trusts are often used by high and ultra-high net worth families to protect family wealth, particularly in jurisdictions such as Jersey, Guernsey and the Isle of Man. However, in divorce proceedings, they are not beyond the reach of the English court.

The key issue is not where the trust is based, but whether the trust assets are viewed as a financial resource available to the beneficiary spouse or if the trust in question is considered nuptial. If they are, this can significantly increase the overall financial settlement, regardless of the fact that the structure is offshore.

In practice, this creates a strategic challenge. The court may not be able to make direct orders against offshore trustees, but it can shape the financial settlement on the assumption that trust funds could be made available.

This is where early, coordinated advice is essential. A clear strategy is needed to:

• Manage how the trust is presented within financial proceedings
• Work effectively with offshore trustees and advisers
• Reduce the risk of the trust being treated as part of the available assets

We regularly advise on offshore trusts in divorce cases, working alongside international advisers to protect trust assets and manage exposure across jurisdictions.

If offshore trust assets are involved in your divorce, taking specialist legal advice at an early stage can make a significant difference to the outcome. Visit our international family law page for more information.

How JMW Acts for Divorcing Beneficiaries

Where trust assets are in issue, the approach taken at the outset of divorce proceedings can have a direct impact on the overall financial settlement. Our role is to provide clear, strategic advice from the earliest stage, helping you manage risk and present your position effectively.

We support beneficiary spouses by:

• Developing an early strategy: we assess how your trust is likely to be treated within financial remedy proceedings, including whether it may be viewed as a financial resource or nuptial settlement, and shape the approach accordingly.
• Advising on Form E and financial disclosure: full and accurate financial disclosure is essential. We advise on how to present your trust interests, what must be included in your Form E, and how to avoid adverse inferences that could affect the divorce settlement.
• Managing engagement with trustees: trustees often have separate legal representation. We work constructively with them to ensure that the position of the trust is clearly understood, while protecting your interests within the financial proceedings.
• Responding to financial claims and challenges: where the other spouse seeks to bring trust assets into the settlement, we advise on how to challenge assumptions around access, control and future distributions.
• Coordinating cross-border advice: in cases involving offshore trusts, we work with advisers in jurisdictions such as Jersey, Guernsey and the Isle of Man to ensure a consistent and effective strategy across all aspects of the case.

This advice often sits alongside wider guidance on high net worth and ultra-high net worth divorce, particularly where trusts form part of a broader asset base.

Q

Can my spouse access my trust in a divorce?

A

Not directly, as the trust assets are not legally owned by you. However, the court may treat the trust as a financial resource if it considers that you are likely to benefit from it or as a nuptial and therefore variable settlement. This can increase the overall financial settlement, even if the assets remain within the trust.

Q

Do I have to disclose my trust in divorce proceedings?

A

Yes. You are required to provide full and frank financial disclosure, which includes any trust interests. This typically forms part of your Form E in financial remedy proceedings. Failure to disclose trust interests can lead to adverse inferences and may affect the outcome of the financial settlement.

Q

Can trustees be involved in my divorce proceedings?

A

Yes. In some cases, trustees may be asked to provide information about the trust, including the trust deed and other trust documents. They can also be joined to the financial proceedings if the court considers it necessary to properly consider the position of the trust assets.

Q

Does it matter that my parents set up the trust before I got married?

A

This can be an important factor. Trusts established by family members before the marriage are generally less exposed on divorce. However, the court will still look at how the trust has operated in practice, particularly whether it has supported the couple during the marriage.

Q

What is the difference between a discretionary trust and a fixed-interest trust in divorce?

A

A discretionary trust gives trustees control over distributions, meaning you have no guaranteed entitlement. This can help to protect assets, but the court may still treat the trust as a financial resource based on past distributions. A fixed-interest trust, by contrast, gives you a defined right to income or capital, which is often easier for the court to factor into a financial settlement.

Q

What happens if my trust is offshore?

A

Offshore trusts, such as those in Jersey, Guernsey or the Isle of Man, can add complexity but are not automatically excluded from consideration. The court will still assess whether the trust assets are available to you as a financial resource or if the trust is a nuptial settlement, which can influence the overall financial settlement.

Q

How are trust assets treated in a divorce settlement?

A

The court will assess whether trust assets should be taken into account when determining a financial settlement. This may involve treating the trust as a financial resource, adjusting the division of other assets, or, in some cases, considering whether the trust is a nuptial settlement that can be varied.

Q

Can a trust protect assets from divorce in England and Wales?

A

Trusts provide very effective asset protection, but they do not guarantee that assets will be excluded on divorce. The court will consider how the trust operates in practice and whether it forms part of the wider financial picture when deciding a fair financial settlement.

Why Choose JMW?

JMW advises on cases involving complex trusts in high and ultra high net worth divorce, including cases involving multi-generational family wealth, offshore structures and sophisticated trust arrangements. Our approach is focused on providing clear, strategic advice where trust assets are under scrutiny in divorce proceedings.

Ruben Sinha is a recognised specialist in this area, with extensive experience advising beneficiary spouses in cases involving complex on and offshore trusts. 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.

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 allows families and family offices to approach wealth protection in a joined-up way that is not always possible at other firms.

We also involve our in-house barrister, Abigail Bennett, at an early stage, providing additional strategic insight into how the court is likely to approach the trust within financial remedy proceedings.

This combined expertise allows us to deliver advice that is both technically robust and commercially focused, helping you protect your position and achieve a fair outcome.