Family Trusts - Discretionary Trusts - Unit Trusts.
Families commonly establish discretionary trusts to protect assets in a separate legal entity and to distribute wealth to beneficiaries in a tax effective manner.
However, in the family law jurisdiction, the Family Court may deem property owned by the trust to be owned by the person who controls the trust. This may allow the Court to add property owned by the trust into the asset pool available for division.
It is therefore important to provide your lawyer with the following documents -
- The deed which originally established the trust
- Any variations or amendments to the original trust deed
- Financial reports and tax returns of the trust
This will allow us to determine -
- The Appointor (i.e., the person who has the power to appoint or dismiss trustees)
- Identity of the trustee(s) and beneficiaries
- The history of distributions the beneficiaries have received from the trust
- The assets and liabilities of the trust
- The balances of beneficiary loan accounts or unpaid present entitlements owed by the trust.
If you are an office-holder or beneficiary of a Trust which owns property that you believe may be caught in a family law property settlement, please contact us for advice.