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UKfamsol
UKfamsol, Family Solicitor
Category: Family Law
Satisfied Customers: 560
Experience:  Very experienced specialist family law solicitor, qualifed in 1994
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Hi, My daughter is in the process of gaining a divorce. The

Resolved Question:

Hi,
My daughter is in the process of gaining a divorce. The main assets, except the family home, are in the name of my daughter who has managed to save and has been received shares under her company's employee share incentive scheme. It has been suggested that she should set up a Trust for the children. If she did this would the assets of the Trust be excluded from the divorce settlement?
Submitted: 2 years ago.
Category: Family Law
Expert:  UKfamsol replied 2 years ago.
Hello and thanks for your question.

Once a divorce petition has been filed at court, either party to the divorce can ask the court to decide how the assets of the marriage should be divided between them, if they cannot reach agreement between themselves. An agreement can be made legally-bindng by filing a draft consent order at court for the district judge to approve. Once approved, the consent order is as binding as an order made following contested proceedings without having to attend court. However, any agreement reached must be on the same principles that a court would decide the case, if it went to court. The most important is the duty on each party of full financial disclosure. Each party completes a detailed financial statement in Form E together with relevent documentation eg the last 12 months of all bank & building society statements, details of stocks & shares etc.

The general rule is that the matrimonial assets are everything is each person's sole name, plus everything that they own jointly with the other party or anyone else or that they have a finanical interest in. So everything must stated on the Form E. It may then be possible to argue that certain assets should be excluded and not counted as matrimonial assets - but all assets must be disclosed first.

The final financial order (whether by consent or following contested proceedings) can certainly include provision for children - and often does - whether in the form of a trust or otherwise. It would be part of the negotiations or court process how much and/or what assets should be in the trust, from where these monies (which accounts) or assets were to come, and who would control & manage the trust.

If your daughter sets up the trust before negotiations or court proceedings start, she will still need to disclose the existence of the trust as well as disclose fully whhat the assets of the trust were, where they originated from and who controls and manages the trust, to satisfy the court or her ex-to-be that this is not a ruse to keep control of certain assets and exclude them from the total pot for dividing between the parties.

Negotiation can be between the parties themselves, or via solicitors' correspondence, or via mediation. The family court anyway now requires the parties to have attempted mediation before it will consider an application to court, so making an appoitbemt with a local family mediator is often a good first step.

Here's where to find a local mediator:

http://www.familymediationcouncil.org.uk/find-local-mediator/

Your daughter would also benefit from some face-to-face legal advice. Here's where to find a specialist family law solicitor:

http://www.resolution.org.uk/findamember/

I hope this helps and I wish your daughter the best of luck.

Thanks and best wishes...
Customer: replied 2 years ago.
Thanks for your detailed response which is most helpful. My daughter wishes to ensure adequate provision is made to safeguard the children's future. The Trust would be set up with the children as the sole benficiaries i.e my daughter would have no claim on the funds.
The husband may well argue that it is a ruse to deny him part of the assets but as they benefit his children how do you consider a court would see this?
Expert:  UKfamsol replied 2 years ago.
Well - the reason that trusts are set up for children is because the children are too young to manage their own money. So the trustees of the trust manage the trust monies ie decide how any money is to be spent. I am not a trusts lawyer, but I would imagine that if the trustees to be appointed are either agreed by the husband (as he will also want his children provided for), or approved by the court, then there should be no problem. The difficulty would be if your daughter had control over the monies of the trust, so that she could use the monies for herself, or not for the best interests of the children - but that will be down to a court to decide whether the trust is genuinely for the benefit of the children or not. I would strongly advise your daughter that the trust she wants to set up is fully discussed with the husband, possibly with the help of a trained and neutral family mediator.

I do hope this helps, and I would be grateful if you would now kindly accept and rate my answer.

Thanks and best wishes....
UKfamsol, Family Solicitor
Category: Family Law
Satisfied Customers: 560
Experience: Very experienced specialist family law solicitor, qualifed in 1994
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