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Whilst many such structures are set up for legitimate tax avoidance reasons, or to pass wealth down through the generations, there are some trusts and corporate entities which are set up and designed to frustrate claims on divorce.
Trust assets can be attacked or taken into account on divorce in two ways:
The English court can transfer an asset owned by a spouse or held to be a resource of the spouse even if the asset is held on that spouse’s behalf by a company or other person. After the 2013 Supreme Court decision in Prest v Petrodel, attacking properties held by offshore companies (often referred to as “piercing the corporate veil”) is more difficult. Each case, however, is fact specific.
Hughes Fowler Carruthers’ partners have acted in most of the leading cases involving and attacking or defending trust and corporate structures, such as Mubarik, Charman, Imerman, and M v M. We also advise trustees on how trusts should be set up and run to ensure that wealth is passed down to future generations and so less vulnerable to attack on divorce.