In the recent case of ND v SD & Ors  EWHC 1507 (Fam) Mrs Justice Roberts considered a preliminary issue relating to the validity of a trust within the context of financial remedy proceedings.
The couple had been married for 25 years prior to the breakdown of their marriage during which time they had two children. The couple also accumulated a large amount of wealth via a property letting business. The couple subsequently decided to incorporate the company overseas.
The wife instigated financial remedy proceedings and during the process of financial disclosure, the husband disclosed the existence of an off-shore trust relating to his shareholding in the business which, in essence, sought to ring fence approximately £50 million pounds of the property lettings businesses assets for the benefit of their children. The wife’s position was that the trust was a sham as it had been created for the sole purpose of defeating her action for a financial remedy.
In Mrs Justice Roberts’ judgment she provided a comprehensive summary of the law of sham trusts and concluded that the trust was valid. The affect of this trust significantly reduced the total pool of marital assets and as a result depleted the wife’s ability to seek a share of those assets. The significance of this decision highlights the importance of engaging in financial disclosure at the outset of any financial dispute.
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In ND v SD & Ors  EWHC 1507 (Fam) Mrs Justice Roberts has been concerned in financial remedy proceedings with the resolution of a preliminary issue concerning whether a trust set up by the husband is genuine or whether, as the wife has claimed, it is a sham and of no legal significance in the computation of the resources which will fall to be divided between them. Roberts J found that the trust is genuine, thus removing some £50 million from the overall computation of the couple's accumulated family wealth.