Divorce and trusts

If family wealth is set up in a trust, it can create particular difficulties on divorce – which, if handled badly, can have catastrophic consequences. We advise both trustees and beneficiaries of trusts in these highly specialised cases.

Helping you to navigate the complex issues affecting trusts on divorce

Trust arrangements can play a critical role in divorce cases. The right to receive income or capital from a trust can be considered part of the overall assets considered by the court. This can have serious consequences for family trustees, professional trustees and beneficiaries, including the spouses themselves and the wider family.

If a client is a beneficiary of a trust, it is critical to understand the legal and commercial dynamics of the trust, and the person who set up the trust’s long-term intentions.

Presenting the trust skilfully – as a platform for negotiation – is absolutely critical to the outcome of such cases.

In certain cases, trusts can be interpreted as “nuptial”, or relating to the marriage. If so, the court can: 

  • Vary such trusts on divorce 
  • Dismiss trustees and appoint new ones
  • Vary the trust deed and the beneficial interests 
  • Distribute assets

We have an excellent, longstanding reputation for our skill and experience in this highly specialised area. Our specialist family lawyers will work closely with our trust and tax solicitors, who are also recognised nationally as leaders in this field, to provide you with the best advice.

As some cases require an understanding of foreign jurisdictions and the ability to work with other lawyers internationally, we also offer access to our trusted network of lawyers around the world.

Our lawyers

  • Our lawyers are at the forefront of any developments in the law, so you can be assured you’re getting the best advice. We have a national reputation for providing lectures for the legal profession at the highest level, including for the Judicial Studies Board. Our solicitors receive top class training throughout their career, and have access to a unique database of know-how and research, with the support of a dedicated professional support lawyer.
  • Seven of our family solicitors are Fellows of the International Academy of Family Lawyers – the kite mark of legal excellence both nationally and internationally.

Our experience

We have particular expertise in helping clients to deal with the issues affecting trusts on divorce. Our extensive experience includes the following examples: 

  • Advising on one of the largest cases ever brought in the High Court, which involved a complex structure of trusts and companies. We represented the interests of the beneficiaries of trusts that were under attack as being “nuptial”. Had the claim for over £100 million been successful, it would have been ruinous for the future generations of the family. The case was successfully resolved ahead of the final hearing. 
  • Working on a trust case where both the wife and her children are beneficiaries of a trust set up by the client’s father. The trust assets comprise shares in a property development company and a farm. Helping our clients to consider the tax consequences of extracting capital from the companies and the trusts has been key to negotiating the outcome. 
  • Advising trustees about wealth protection for the next generation, ahead of restructuring the family wealth. The aim is to preserve family assets and businesses by writing pre-nuptial agreements and setting up  family investment company structures.
  • Acting for the trustees of a substantial land holding and farming business, our solicitors presented the evidence advantageously and engineered a successful outcome.

Our clients

We help and advise a wide range of clients, including: 

  • Families looking to protect wealth for future generations 
  • Family offices and professional trustees (when one of the beneficiaries is involved in potential divorce proceedings) 
  • Couples with beneficial interests in a trust (eg, arising from capital tax planning for a business that may be sold) 
  • Couples who are divorcing, where one spouse is a beneficiary of a generational trust scheme and the intention is to pass the wealth down to children and grandchildren

We also advise foreign lawyers and act as consultants for English lawyers in protecting trust assets, either directly or indirectly involved in divorce negotiations or court proceedings.

What our clients and others say about us

Our teams of family, trusts and private tax solicitors are all highly rated in both of the leading independent guides to the legal profession, Chambers UK and Legal 500. Comments about our lawyers from peers and clients include the following:

  • “They're at the forefront of what they do …" Chambers UK
  • “[Mills & Reeve’s private wealth team] wins particular praise for its expertise on onshore and offshore matters, especially those involving trusts. A client states: ‘it is the best firm I have ever worked with; I can reach them when I ring them up, and there is never a delay’.” Legal 500 
  • “[He] is one of the best regarded private client operators in the region. He handles all aspects of estate management, from tax mitigation to succession planning. ‘He is very approachable, knowledgeable, and doesn’t just respond to what you ask – he actually comes up with positive suggestions’, a source notes.” Legal 500
  • “They have a reputation equal to the best in London.” Legal 500
  • “… easily the leading family practice in the area …” Legal 500
  • “… down to earth and reliable, and builds good rapport with clients …” Chambers UK
  • “… stands out for his technical skill and personal service …” Legal 500
  • “… goes the extra mile…” Legal 500

Legal resources you may find useful

  • divorce.co.uk: trusts on divorce - our family law website offering free information on divorce, including guidance on trusts. 
  • Family Law Hub – this is a groundbreaking know-how base available for subscription online. It contains Mills & Reeve’s know-how and legal research, together with video content on legal topics.