Trusts—using trusts or property law in financial proceedings
Produced in partnership with Rebecca Dziobon of Penningtons Manches Cooper
Trusts—using trusts or property law in financial proceedings

The following Family practice note produced in partnership with Rebecca Dziobon of Penningtons Manches Cooper provides comprehensive and up to date legal information covering:

  • Trusts—using trusts or property law in financial proceedings
  • Invalidity
  • Sham trusts
  • Property law and trust assets
  • Setting aside a disposition using MCA 1973, s 37

Trusts—using trusts or property law in financial proceedings

In addition to the court’s power to vary a trust that is a nuptial settlement within the meaning of section 24(1)(c) of the Matrimonial Causes Act 1973 (MCA 1973) (see Practice Note: Trusts—variation of a nuptial settlement), and circumstances where the court may trust assets as a financial resource of one of the parties (see: Introduction to trusts within financial proceedings — Trusts as a financial resource), an alternative route for applicants seeking to bring trust assets into account in financial proceedings is to use trusts and/or property law principles to attack the trust and its assets.

The main trust/property law considerations for the family law practitioner are:

  1. invalidity

  2. sham trusts, and

  3. property law and trust assets including proprietary estoppel

The Supreme Court, in Prest v Petrodel Resources, has emphasised that the family courts are subject to the same general legal concepts as in other courts. Lord Sumption stated (at para [37]):

‘If a right of property exists, it exists in every division of the High Court and in every jurisdiction of the county courts. If it does not exist, it does not exist anywhere.’

Family practitioners should ensure they have a sound grasp of what needs to be proved before embarking upon an attack on a trust or its assets. See also Practice Notes: Nature and classification of trusts—the three

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