Trust and Divorce

I have recently made a contribution on trusts and the approach of the Court on a divorce.

https://trustsdiscussionforum.co.uk/t/flexible-ipdi-and-divorcing-remainder-man/23915/3

A settlement by a third party is not off limits as regards whether it may constitute financial resources of a party (my para 1). So no absolute assurance can be given to the father in Martyn’s client case.

It can also be varied if it is a nuptial settlement (my para 2). It should help if the daughter in law is not named as a beneficiary. I agree that it is less likely to be nuptial if made by a non-party and if it is not made with the marriage in mind as a motivating factor.

It cannot be a reviewable disposition under s37 MCA; only a party can make one.

The Court can most certainly pierce the veil of incorporation and find the company’s assets are held on the trusts of which its shares are trust property and are thus held on trust for the settlor: Prest v Petrodelhttps://www.bailii.org/cgi-bin/format.cgi?doc=/uk/cases/UKSC/2013/34.html&query=(Prest) It seems that this would only be applied to a settlor who was a party by analogy with s37 one imagines, though it is a case of standalone judicial legislation or “creativity”.

s10 MCA requires the financial position to be dealt with before a final order can be given. Refusal of the order is the sanction. I do not see that there is a time limit in the Act or the FPR but no doubt the Court can set one (I am not an expert in the procedure).

But a final order does not always give finality. Subsequent events such as the increase in assets or their value or an inheritance etc etc (Barder events, on which important case law) can found a re-opening of the position. In Wyatt v Vince the wife made an application 27 years after separation and 19 years after the final divorce order:https://www.bailii.org/uk/cases/UKSC/2015/14.html

There is also a right to apply to set aside a final order for non-disclosure, fraudulent or not, negligent or inadvertent, on cogent evidence adduced. Long delay may cause refusal and the evidence must be such as could not have been made available with due diligence at the original hearing.

Jack Harper

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