Tuesday, April 28, 2015

Lessons from decisions since Spry

As set out in earlier posts, and with thanks to the Television Education Network, today’s post addresses the issue of ‘Lessons from decisions since Spry’ at the following link - https://youtu.be/IWsmKqpgwbs

As usual, a transcript of the presentation for those that cannot (or choose not) to view the presentation is below –

Immediately following Spry, the feeling of many observers was that there would never be any outcome in a family law matter other than to say that the assets of trusts were entirely exposed. 

What actually happened, however, is that despite the decision in Spry and a number of subsequent decisions have reinforced this, that trusts potentially remain a very robust asset protection vehicle.

Having said that, it is also clearly the case that the court will not be in any way restricted in terms of what they can and cannot do with the assets of a trust, if they have a legitimate reason to believe that there are grounds for doing so. 

Some examples might be if:

    • the trust is actually the ‘alter ego’ of one of the parties to the relationship;
    • it can be seen that the assets of the trust have really been created because of the joint effort of the relationship; and
    • the assets of the trust have traditionally always been used for the benefit of not just the two spouses, but also wider family members.

In each of those types of scenarios, the court will rely on, if not Spry itself, certainly principles adjacent to Spry, to look beyond the trust structure and deal with the underlying assets of the structure.