Setting up a Discretionary Trust for protection against Divorce

Discussion in 'Legal Issues' started by 2935, 21st Oct, 2016.

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  1. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    There is much that can be done, but it will be weak of challenged.

    Some things
    - change control of existing trusts
    - Dispose of property and 'spend' the cash (if you own or control the ownership of the property.
    - Remove access to records
    - move cash

    These things could be done well in advance of saying 'bye bye'.

    Changing control of trusts is obvious and easily challeged, but the spouse will have to fight harder.

    Same with disposing of property - especially to related parties. Transactions can be voided, but effect will be needed to do this.

    Removing access will hinder the spouse finding out things but again they can get access to this information through the court process (make sure you download the spouse's entire hard drive beforehand.

    Cash in bank accounts can be traced, but harder if in other accounts.

    Moving cash overseas can make things harder because the Australian courts do not have jurisdiction.
     
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  2. 2935

    2935 Well-Known Member

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    Thanks Terry,
    Would it be possible for the trust to take on a Testamentary Trust nature if the assets going into the trust were from a deceased estate only and with the Trust Deeds mentioning that this is the purpose of the Trust?
    The goal being increased Family Law asset protection.
     
  3. Joynz

    Joynz Well-Known Member

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    Hmmm, setting up a trust (legal instrument) to avoid sharing money in the case of a potential future divorce...

    It seems like this would test the trust (emotional bank balance) of even the strongest of existing marriages!

    It might even prompt the other party to question the marriage and why their spouse is making these preparations.
     
    Last edited: 22nd Oct, 2016
  4. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Nope.
     
  5. Marg4000

    Marg4000 Well-Known Member

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    Hubby and I have the perfect arrangement, mutually agreed.

    When we came home from our honeymoon in the early 1970s we had $135 in the bank.

    So if either of wants out, we can take our $67.50 and bu**er off.!!
    Marg
     
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  6. 2935

    2935 Well-Known Member

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    Joy...hmmm. you have taken a moral position on this question I have posed. Naturally when you do so you leave yourself open!

    I won't take advantage here but will say that the Family Law Court takes a pro female stance in most cases. It's simply wise for any male contemplating a marriage to take steps to protect himself. Many and I really mean MANY men who have gone through a divorce will tell you about the "entitled" mentality many of their ex spouces have to their and their families property even though in a lot of cases they bought no assets to the marriage.

    If it were so simple Marg! You are to be commended.