Trust Cannot Be Used to Hide Assets, Rules Court

A divorcee who considered that her husband had set up a trust in order to defeat her claims for a financial settlement on divorce has obtained the agreement of the High Court that the documentation relating to the trust and its proceedings should be disclosed.

The decision followed an earlier court ruling in which the woman’s ex-husband was found guilty of contempt of court for failing to comply with orders, made in 2011, to disclose his assets.

The ex-husband claims to have no assets other than interests in two pension funds. In 2005, he purchased a property in the Bahamas using a trust, the sole beneficiary of which is his second wife.

The documents which the Court has demanded should be disclosed are:

  • the trust deeds and/or declaration of trust;
  • any letter of wishes;
  • all documents relating to the assets settled on trust, including any deeds of transfer or equivalent documents;
  • all documents identifying assets settled on or held by the trust from time to time;
  • minutes of meetings of the trustees of the trust;
  • documentation relating to the addition or exclusion of beneficiaries;
  • documentation relating to any change of the trustees;
  • documentation relating to any amendment to the terms of the trust; and
  • documentation relating to any power of revocation of the trust if separate from the trust deeds.

The judge who heard the application commented that there was every reason to believe that the ‘family trust is the recipient of assets which were once the defendant’s and may still be his for all practical purposes. In those circumstances, the disclosure sought is reasonably ancillary to that required by the previous orders, which have not been properly complied with. I accordingly find that I have jurisdiction to make the order sought to ensure that the orders previously made are effective, and that it is right to do so.’

The courts will take a very strong exception to people involved in similar proceedings seeking to hide assets or misrepresent their true financial position.

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