When a relationship breaks down, property settlement is not always just about the family home. For many people, the more difficult issues sit in trusts, companies, family businesses, investments and loans between related entities.
Why complex structures matter
The first step in a property settlement is working out what forms part of the asset pool. With ordinary assets, that can be relatively straightforward. With trusts and companies, it is often more complicated. The Court may need to consider whether a trust or company interest is property available for division, or whether it is better understood as a financial resource that may affect the overall outcome.
Property pool or financial resource?
The distinction matters. If an asset is treated as property, it may form part of the pool to be divided. If it is treated as a financial resource, it may not be divided in the same way, but it can still be relevant to what is just and equitable. In practical terms, the Court will look at the structure and how it has operated in real life. Control, access to distributions, the terms of the trust deed, the purpose of the structure and the history of dealings can all be important.
Recent guidance on trusts
Recent family law decisions have reinforced that trust assets are not automatically treated as property of the parties. The result depends on the facts, including who controls the trust, who can benefit, where the assets came from and whether the structure has been used as part of the family’s wealth during the relationship. A trust connected to an intergenerational family business may be viewed very differently from a trust that one spouse effectively controls and uses as their own.
What clients should do early
If your matter involves trusts, companies or a family business, early advice is especially important. You may need trust deeds and variations, company records, financial statements, distribution records, loan accounts, tax returns and details of who holds key roles such as trustee, director, shareholder or appointor. Getting this information early helps identify what is genuinely in issue and can make negotiations more focused.
How we can help
Complex structures do not necessarily make a matter impossible to resolve, but they do require careful analysis. We can help you understand what is likely to be treated as property, what may be a financial resource, and what information is needed to properly assess your position.
