Trust  

Lessons to learn about the use of trusts

  • Identify the insight that the case gives into the Family Court’s approach towards trusts.
  • Describe the methods that might be used to elicit funds from that resource.
  • List the circumstances in which such methods might be deployed.
CPD
Approx.30min

Other features to consider as a trustee when the trust cannot meet an expectation or encouragement to provide funds to a beneficiary to meet their obligations are:

  • If the trust is dynastic in nature i.e. a trust is set up to provide for future generations of beneficiaries and has provided for previous generations too.
  • The history of capital distributions to any beneficiaries in the past.
  • What the assets of the trust are and the level of liquidity and distribution of income has been or could be.
  • Whether both parties are beneficiaries – this could be a nuptial settlement, in which case the court has the power to make orders directly against the trust.

(3) The fact that the trust was paying out large income payments (as opposed to capital distributions) to the husband meant that the capital awarded to the wife – a sum of £4.25m in addition to her retaining the family home – could be paid in instalments over five years.

In this case, having failed to engage with the court process, some might say that the husband got away lightly with no costs orders made against him though.

What it does show is the overwhelming motivation of the court to see justice being done, to ride over obstacles thrown in the way by difficult litigants, and ignore the noise to focus on the key legal issues to provide a fair outcome. 

Julian Hawkhead is the senior partner at Stowe Family Law

CPD
Approx.30min

Please answer the six multiple choice questions below in order to bank your CPD. Multiple attempts are available until all questions are correctly answered.

  1. The judgment described how the husband behaved as what?

  2. According to the author, the court process was temporarily frustrated, to the financial cost of which family member?

  3. Finish the sentence: "Capacity at its broadest level is often linked to..."

  4. What income would the husband continue to receive from the trust after tax?

  5. Any assessment of needs by the court is what?

  6. True or false? "How the party receiving that maintenance then chooses to spend the money is up to them and, if spent unwisely, is almost impossible where a clean break has taken effect to come back for more."

Nearly There…

You have successfully answered all the questions correctly, well done!

You should now know…

  • Identify the insight that the case gives into the Family Court’s approach towards trusts.
  • Describe the methods that might be used to elicit funds from that resource.
  • List the circumstances in which such methods might be deployed.

I completed this CPD in

To bank your CPD please complete the form below.

Were the stated learning objectives met?

Why weren't they met?

What did you learn from undertaking this CPD exercise?

Why did you undertake this piece of learning?

Any comments about this article or FTAdviser's CPD in general?

Banked!

Congratulations, you have successfully completed and banked this piece of CPD

Already Banked!

You have already banked for this article.

To bank your CPD you must or

Register

One or more questions have been incorrectly answered,
 please review your answers and try again.

Please complete all the above text fields to bank your CPD.

More Investments CPDSee my completed CPDSee all CPD