Judgments of the Family Courts are often dismissed as the
preserve of warring couples or parents in dispute and seen as
having little relevance to other spheres of life. However the Court
of Appeal is today considering legal issues concerning Trusts and
Settlements that could have pivotal impact on a whole spectrum of
legal advice in the wealth planning sector including Trusts Law,
Charities Law and Matrimonial Law.
In Quan v Bray the parties 'worked tirelessly'
to run a charity to benefit and save Chinese tigers. The trust
assets were worth approximately £25m and the parties had
almost no other assets. The wife argued that the trust assets of
property (including a matrimonial home in which they lived rent
free), land in South Africa and cash constituted a nuptial
settlement or resources available to meet her needs. The husband
argued that the parties had not and could not, benefit from the
trust and its sole purpose was for the benefit for the Chinese
Sir Paul Coleridge hearing this case in 2015 acknowledged that
it was possible for a trust to become nuptialised and therefore
capable of variation if there was a flow of benefit to the parties
during the marriage from the trust. However in this case the trust
was not nuptial.
Sir Paul's approach is not universal amongst the judiciary.
Sir Peter Singer in Joy v Joy-Morancho is clear that a trust cannot
be nuptial unless it is nuptial from the outset.
Hopefully the Court of Appeal's judgment in this case will
give clear guidance on the issue of creation and treatment of
nuptial settlements. Family practitioners, trust lawyers and
charities lawyers all need clarity so that they can give clear
advice in the establishment and management of trusts as part of
legitimate succession or wealth planning. The application of
principles arising from the treatment of legitimate trusts are
potentially far reaching (even to the corners of the Indian jungle)
and it is important to highlight again the value of considering
family law issues at all stages of trust planning and
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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The well documented case of Heather Ilott and her attempt to overturn her Mother's will appears to have come to an end with the Supreme Court ruling that, whilst she may have be granted some money from her Mother's estate, it is a far smaller sum than the Court of Appeal awarded.
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