Wife cannot include trust assets in divorce settlement

A wife has been told that the assets of a trust she set up with her husband cannot be included in their divorce settlement.

The case involved a couple who had established a charitable trust to conserve South China’s tiger population. It held land for conservation purposes.

The trust was fully discretionary and held considerable assets. The couple were not named as beneficiaries.

During divorce proceedings, the wife alleged that the husband had established the trust not only to advance the conservation project but also to provide financial benefit and support for himself and for her personally.

She claimed that this meant the trust was a post-nuptial settlement.

The judge found the husband’s evidence more credible than the wife’s and concluded that the trust was not a post-nuptial settlement.

The wife appealed saying that the judge had failed to deal with emails from a lawyer that potentially indicated the trust was used as a tax shelter. The judge had also failed to deal with an email from the husband, which appeared to anticipate trust assets being released to the couple on its winding-up.

The Court of Appeal dismissed the claims. It held that the judge had been entitled to conclude that the emails did not begin to carry the weight attached to them by the wife. In addition, an accountant’s report prepared on the husband’s behalf showed that the couple had not received benefits from the trust and there was no evidence to suggest that they ever intended to receive any benefits.

Please contact Lorna Barry or Shelley Rolfe if you would like more information about the issues raised in this article or any aspect of family law.