Trusts and divorce

Are assets in a trust protected from divorce?

The English court's powers in respect of trusts and divorce depends on the extent of the connection between the trust and the marriage.  The court will consider factors such as whether the trust was made during, or in contemplation of, marriage, whether one of the spouses or a close relative settled the trust, whether spouses are included in the beneficial class, the identity and number of other beneficiaries, and possibly the content of any letter of wishes.  If the connections between the trust and the marriage are particularly strong the trust may be considered to be a "nuptial" trust, which means the court has the power to vary the trust.  Having the power to vary does not, however, mean that the court will exercise that power.

All trust assets (regardless of whether or not they are nuptial and capable of variation) are capable of being taken into account in divorce as a resource available to one of the spouses when the court is determining what is a fair division of assets between the spouses.  Whether or not a trust is actually a resource will be a matter of evidence, but the court will essentially be looking to determine whether the trustees would advance funds if requested to do so by the beneficiary spouse.  If the court decides a trust is a resource, it may think it fair to make an order against the beneficiary spouse (rather than the trust) which, for example, results in the non-beneficiary spouse receiving a greater share of the non-trust assets.