Foreign Assets the third in my brief sequence of Blogs, relating to Trusts.
I start with the assumption that one spouse is a potential beneficiary under a discretionary trust and the other is not. How do they keep up some semblance of their lifestyle if they are cut off from the trust ?
In a situation where the Trust assets are in the hands of foreign Trustees, for example British Virgin Islands or Jersey, the dilemma for the Trustees is whether to engage in the matrimonial/divorce process at all. Generally speaking it is perfectly possible for foreign Trustees to get orders in their own jurisdictions, effectively preventing the enforcement of UK Court Orders against the Trust assets. If, on the other hand, the Trustees join into the proceedings in the United Kingdom to argue their corner on behalf of the trust and the other beneficiaries , they can be held to have submitted to the English jurisdiction and therefore be bound by the UK Orders to a greater or lesser extent. This is a big decision for Trustees to have to make.
Care also needs to be taken where the Trust assets themselves might actually be located in the United Kingdom. If that is the case, the United Kingdom Courts will not be slow in making Orders against those assets where the need to do so is determined. If the assets and the trustees are abroad, then the non beneficiary half of a couple divorcing in the United Kingdom needs to have a very realistic assessment done of their prospects of enforcing against that Trust. Indeed enforcement may not be possible.
As in all Trusts, however, it has been said that the Courts would take a realistic and pragmatic approach to these assets and the United Kingdom Courts are becoming increasingly sophisticated at unearthing the truth behind some of these complex arrangements and making Orders accordingly. This is an area for specialist advice.
Faye Remnant is part of our Family Law team based in Loughborough; our Solicitors in Loughborough are experts in their fields and dedicated to quality client care. If you would like to find out more about our solicitors in Loughborough please contact us.
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