Tuesday, November 3, 2015

Lessons from the Family Court case of Essex

As set out in earlier posts, and with thanks to the Television Education Network, today’s post addresses the issue of ‘Lessons from the Family Court case of Essexat the following link - https://www.youtube.com/watch?v=McHPGXipl2I

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

While Essex hasn’t probably received as much media attention as the Spry decision, in some respects, it's arguably the leading decision in the family law space in relation to trusts.  As usual, a full copy of the decision is available here http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/cth/FamCAFC/2009/236.html?stem=0&synonyms=0&query=essex.

The husband in Essex:
a          was not the trustee of the structure;
b          had not really received any distributions; and
c          had not contributed to the assets of the trust being generated in the first place as they had come down the family line.

Despite these facts, the court still held the assets to be the husband's resource and therefore took into broad account the terms of matrimonial property settlement. 

Importantly though, the assets were not considered property. That was a very important part of the decision, because the court also found that despite the fact that the husband did not have any control over the structure and had yet to receive any benefit, there was absolutely clear evidence that he would ultimately receive it, in the court's opinion. 

While on the face of the decision, Essex was probably a 'loss' for the husband, the reality is that the decision supports this idea that trust structures will only be attacked where the court believes that it is absolutely legitimate in the circumstances and in any other scenario that the integrity of the trust structure will be respected and the assets will, therefore, be protected.