Family law and Discretionary Trusts

Posted on Dec 13, 2017 by Rebecca Furner   |   Categories: Family Law

So, you’re going through a divorce and your ex is trying to claim a piece of the Discretionary Trust that your parents set up years ago. What now?

Whether you’re still in negotiations or if court proceedings are on foot, here are a few things to consider:

1. Do you actually have any control over the trust or do you depend wholly on your parents’ discretion and volition?

2. Do you have any proprietary interest in the trust property?

3. Are you the appointer, trustee or even a named beneficiary?

4. If you’re only a member of the class of eligible beneficiaries, are the distributions of income or capital consistent or irregular?

5. Can you reasonably rely upon the distributions as a financial resource or is it a mere expectancy?

A Judge is unlikely to interfere with property in which neither party has a legal or equitable interest. You should speak with your family lawyer about how the trust in your case should be dealt with post-separation.