Traditionally trusts have been set up to protect fortunes from tax but now they are more frequently set up to keep wealth within a family and to protect it from financial claims on relationship breakdown.
The court’s function in financial proceedings is to establish the assets of the marriage then divide them between the parties in a fair way. This is much harder in cases where there are assets held in trust. The court has the power to vary the terms of both ante and postnuptial trusts and it has been known for the court to extinguish or reduce one party’s interest in a trust to make provision for the other. Each case that comes before the court will be treated on an individual basis; however, the courts are showing a tendency to treat a trust fund with less sensitivity if it is necessary to call upon that particular resource to ensure that both parties’ needs are met. Even offshore trusts are open to potential claims, as some jurisdictions will follow English court orders.