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High asset divorce: Do trusts really protect property?

Family trust funds won't always be a protective measure for assets when a couple is separating or divorcing. A British Columbia resident who is embroiled in a high asset divorce situation may believe his or her assets that are sheltered in a family trust may not figure into a divorce settlement. Things can become even more problematic when there is no marriage contract in place.

When property is held in a trust, it is often the belief that it won't have to be shared with an estranged partner. In a recent case, a family court judge wanted to know if the property actually held in trust belonged to the husband for whom the trust fund was set up -- in other words, he was the beneficiary of the trust. But it was ruled that legal ownership belonged to the trustees of the trust who hold the property for the beneficiary. In this case, however, the husband was also one of the trustees and because of that he had to include the property as part of net family property.

Spouses who are financially well-off and who try to avoid sharing assets with a spouse from whom they are separating need to understand how trusts actually work in these situations. There are instances when a trust fails to do what it was set up to do. It is wise to have these trusts reviewed periodically by a legal professional.

Individuals in a high asset divorce will want to protect their assets. A client can get answers to complex and confusing issues regarding the division of assets from an experienced British Columbia lawyer. Divorce situations where there is a lot at stake financially can be even more complex in nature.

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