During a divorce, declaring your assets is crucial to reach a fair financial settlement with your spouse. One asset that can complicate matters is an interest in a trust. Whether you're the sole beneficiary or one of many, the way your trust assets are handled can impact the final settlement. At WSP Solicitors, Ruth Appleton Chartered Legal Executive from our Private Client team and Beth Evans, Director and Head of Family Law, are here to help guide you through the process, ensuring all relevant financial resources, including trusts, are properly considered in your divorce settlement.
Understanding trusts and their role in divorce financial settlements
During a divorce, declaring your assets is crucial to reach a fair financial settlement with your spouse. One asset that can complicate matters is an interest in a trust. Whether you're the sole beneficiary or one of many, the way your trust assets are handled can impact the final settlement.
How trusts are considered in divorce settlements
Assets held in trust for your benefit will be considered in your financial settlement. Factors such as whether you are an absolute or potential beneficiary play a key role in determining how these assets are treated.
The impact of absolute and potential beneficiary status
If you are an absolute beneficiary or receive a regular income from a trust, these assets are likely to be taken into account during your divorce as financial resources available to you.
The role of lifetime trusts and nuptial settlements in divorce
Lifetime trusts, especially those created with your spouse, may be considered nuptial settlements and could be varied by the Court during divorce proceedings. However, trusts created to benefit your children or grandchildren are less likely to be changed.
Protection of assets and trusts during divorce
It is crucial to note that during divorce proceedings, you cannot move your assets into a trust to avoid them being included in the financial settlement. Similarly, you cannot alter a deceased person's Will to redirect assets once a Final Order has been issued.
WSP Solicitors' guidance on trusts and financial settlements
WSP Solicitors can help advise you on your assets and financial settlement during divorce. We also provide expert guidance to Trustees, especially when required to make payments or vary trust provisions.
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.
