International trusts in divorce and dissolution of a civil partnership: A comprehensive guide

The financial element linked to divorce proceedings or the dissolution of a civil partnership are inherently complex, and the involvement of international trusts adds another layer of intricacy.

At Moore Barlow, we provide expert guidance to help you navigate the unique challenges posed by international trusts in divorce or dissolution of a civil partnership, ensuring your interests are protected and that you achieve a fair outcome.

Understanding international trusts

International trusts, often set up in offshore jurisdictions, are used to manage and protect assets across different countries. These trusts offer various benefits, including asset protection, tax planning, and confidentiality. However, their international nature can complicate the financial settlements relating to a divorce or a dissolution of a civil partnership, particularly when different legal systems are involved.

Jurisdictional challenges

One of the primary challenges in dealing with international trusts during divorce or dissolution of a civil partnership is jurisdiction. Courts need to establish whether they have the authority to make decisions about the trust. This determination often hinges on factors such as the location of the trust, the residence of the parties involved, and the connection between the trust assets and the jurisdiction in question.

Establishing jurisdiction

The location of an offshore or international trust and how it is structured is pivotal to how it can be treated within the financial element of divorce or dissolution proceedings. The location of the trust will need to be established, and the governing law assessed, as some jurisdictions have ‘firewall legislation’ in place. This means there is legislation in place to protect the trust from being interfered with by foreign judgments and will consequently impact a family courts ability to deal with the trust asset.

Enforcement of court orders

Even if a court decides it has jurisdiction, enforcing orders involving international trusts can be challenging. Cooperation from the jurisdiction where the trust is established is crucial and a specialist family lawyer will be able to provide you on advice as to whether a mirror order is required or if the jurisdiction of the international trust is one where there is ‘firewall legislation’.

International cooperation

To address enforcement challenges, it is essential to work with legal experts familiar with both domestic and international legal systems. These professionals can facilitate cooperation between jurisdictions, ensuring that court orders are enforceable or to assist in creating the required legal documentation in the additional jurisdictions. This may involve engaging with legal professionals in the jurisdiction where the trust is established to navigate local laws and enforcement mechanisms.

Disclosure requirements

Full disclosure of all relevant information about the international trust is required in the financial element of divorce or dissolution proceedings. This includes trust deeds, financial statements, letters of wishes, and any other documents that provide insight into the trust’s administration and assets. Transparency is critical to ensure a fair division of assets and to prevent legal penalties or adverse inferences for non-disclosure.

Importance of full disclosure

In the context of international trusts, full disclosure is even more crucial due to the complexities involved. Failure to disclose all pertinent information can lead to adverse inferences by the court and potential legal consequences. Ensuring transparency helps the court make informed decisions and promotes a fair settlement.

Protecting international trust assets

Safeguarding international trust assets during a divorce or dissolution proceedings requires strategic planning and meticulous documentation. Clearly defining the purpose of the trust and the beneficiaries can help protect the assets. Additionally, maintaining thorough records and engaging with legal experts who specialise in international trusts can strengthen your position.

Strategic planning

Proactive planning is essential to protect international trust assets. This involves regularly reviewing the trust structure and administration to ensure compliance with current laws both within England and Wales and within the jurisdiction the trust is located in. Engaging with legal and financial advisors who specialise in international trusts can provide valuable insights and strategies to maintain asset protection.

Legal considerations and case law

Trusts can be complex and case law illustrate how courts handle international trusts in divorce or dissolution proceedings. Understanding these precedents can provide valuable insights into the potential outcomes of your case and guide your legal strategy.

Landmark cases

Cases such as Charman v. Charman (2007) highlight the challenges of dealing with offshore trusts in divorce settlements. In this case, the court included the husband’s offshore trust in the marital assets due to his control over the trust. Such precedents underscore the importance of understanding the legal nuances and preparing adequately for potential challenges. Expert advice early on is crucial.

The role of trustees

Trustees play a crucial role in divorce or dissolution proceedings involving international trusts. They may be required to provide documents, testify in court, and comply with court orders. Ensuring that trustees understand their responsibilities and are prepared to cooperate with legal proceedings is vital.

Trustee involvement

Trustees’ involvement can significantly impact the outcome of the case. Their cooperation and transparency can facilitate a smoother legal process and help the court make informed decisions. Preparing trustees for potential legal obligations and ensuring their readiness to participate in proceedings can enhance your legal strategy.

How Moore Barlow can help

Dealing with international trusts in divorce or dissolution proceedings requires specialised legal expertise and a strategic approach. At Moore Barlow, we are dedicated to providing comprehensive support, ensuring that your interests are protected and that you achieve a fair outcome. Our team of experienced solicitors is here to guide you through the complexities of international trusts and divorce or dissolution, offering personalised solutions tailored to your unique circumstances.

At Moore Barlow, we prioritise building strong, lasting relationships with our clients. We take the time to understand your specific situation and long-term goals, allowing us to offer bespoke legal solutions that address both immediate needs and future aspirations. Our open and communicative culture ensures you are always informed and involved in the process.

We recognise that your immediate need is part of a larger picture, and we strive to provide solutions that consider the full context of your life. By doing so, we help you achieve long-term stability and success, whether you are managing a business or protecting your family’s interests.

Contact us

If you are facing a divorce or dissolution of a civil partnership involving international trusts, contact us today to discuss your situation. Our team of expert solicitors at Moore Barlow is ready to provide the support and guidance you need to navigate this complex process. Let us help you achieve the best possible outcome for your specific needs. Contact us today.

Explore our family and divorce services at Moore Barlow to discover more about our comprehensive legal support. Talk to our team for detailed information and to learn how we can assist you during this challenging time.