ARTICLE
14 May 2015

Divorcing Beneficiaries & Requests To Exclude A Divorcing Spouse

CC
Collas Crill

Contributor

Collas Crill is an offshore law firm with offices in BVI, Cayman, Guernsey, Jersey and London.

We deliver a comprehensive range of legal services to clients locally and globally in four broad practice areas: Financial Services and Regulatory; Insolvency and Corporate Disputes; Private Client and Trusts; and Real Estate.

Clients include some of the world’s leading financial institutions, international businesses, trusts and funds, as well as high-net-worth individuals and families across the globe. We continue to build a network of independent and trusted partners around the world including the Caribbean, the Channel Islands, the UK, Europe, the US, the Middle East, South Africa and Asia.

It is common for Jersey discretionary trusts to grant a power to the trustees to exclude a beneficiary from receiving any further benefit under the trust, but should you exercise this power to exclude a divorcing beneficiary?
Jersey Corporate/Commercial Law

It is common for Jersey discretionary trusts to grant a power to the trustees to exclude a beneficiary from receiving any further benefit under the trust, but should you exercise this power to exclude a divorcing beneficiary? In a recent case before the court in Jersey it was held that the degree of reasonableness of a trustee's decision to exclude a beneficiary is the main factor in determining whether it is a proper exercise of such power by the trustee. 

The wife in this case had been awarded approximately HK$832.5 million (of which approximately HK$770.5 million was to come from the trust fund).  The court held that, as the money was to be paid to the wife as part of a divorce order intended to achieve a clean break, it was indeed reasonable that the trustee conclude that the remaining assets of the trust should be held exclusively for the remaining beneficiaries of the trust, to the exclusion of the wife. See Representation of the Otto Poon Trust [2014].

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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