There are many reasons for establishing an asset protection trust - including tax liabilities and litigation - and also protection from ex-spouses. There have been several high profile divorce cases in recent years and divorce for those with valuable assets can be a very costly affair.
The high divorce rate, estimated now to be 40%, is draining - both financially and emotionally – and while no-one enters a marriage with the expectation of it failing, more and more couples are considering the future impact of separation on their wealth. It is possible to protect your assets to a certain extent by the use of pre and post nuptial agreements. These are particularly useful for couples who have a large discrepancy in financial value, although absolute honesty is required by both parties. The divorce courts take a very dim view of people trying to hide their assets.
All income and assets acquired by either spouse during a marriage are considered marital property - even if the asset is in one spouse’s name -and is subject to division between the couple. Property owned prior to marriage, any gifts and inheritance are excluded and are not subject to division and not considered marital property provided they have been kept separate.
Julie-Ann Harris, Head of our Family Team, says "Families increasingly do not want to rely on the courts to allocate their assets and a trust deed needs to be worded very carefully and tailored to your specific needs. Legal advice should be sought in the drafting of the deed as this document is vitally important to the protection of your assets. We are happy to discuss any questions you may have, please get in touch."
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