Divorce and Jersey Trusts: Protecting Your Future

Using a trust during divorce proceedings, particularly in Jersey, can offer a variety of benefits, primarily around the management and protection of assets, as well as ensuring that certain individuals (like children, other family members, or even a spouse) are provided for after the divorce.

Trusts are flexible tools that can help manage wealth, allocate financial support, and potentially shield assets from division in divorce settlements, but the effectiveness of a trust in these situations depend heavily on the structure of the trust, its timing, and the specific circumstances of the divorce.

PROTECTING ASSETS FROM DIVISION

One of the primary reasons people consider using a trust in divorce is to protect certain assets from being included in the marital estate. In Jersey, as in other jurisdictions, assets that are acquired during the marriage are typically considered matrimonial property and are subject to division upon divorce. However, assets that were owned prior to the marriage, inherited assets, or gifts received by one spouse can potentially be excluded from division.

It is important to note that if the court suspects that a trust was created for the sole purpose of evading fair division of assets, it could disregard the trust or order the assets to be included in the settlement. In Jersey, where trusts are governed by specific laws, if a trust is deemed to have been set up with the intention to defeat the equitable division of assets, the court could order that the assets held in the trust be taken into account when distributing the matrimonial property.

Timing is crucial here. If a trust is established right before or during divorce proceedings with the express purpose of shielding assets from the other party, the court may consider this as an attempt to defraud or hide assets, and such actions could negatively affect the outcome of the divorce.

PROVIDING FOR CHILDREN OR OTHER DEPENDENTS

A trust can also be an excellent way to ensure that children or other dependents are financially supported after a divorce, especially when there are complex family dynamics, such as children from previous relationships or a spouse who might need long-term financial assistance.

A trust can be set up to allocate financial resources for the benefit of children, ensuring they receive education, healthcare, or general support without the need for direct payments through the other spouse, which could be contested in court. A family trust that specifies how certain assets should be used for the children’s benefit (like educational funds or healthcare costs) can offer a level of security for the children’s needs, particularly in cases where the parents’ relationship is strained or if one parent fears that the other might not adequately provide for the children.

In some cases, a trust can also ensure that a spouse who is financially vulnerable, such as one who has been out of the workforce for years or is not as financially independent, has a source of income in the future. Setting up a trust for spousal support, either on a temporary or long-term basis, can be a way of providing for the spouse and ensuring they have access to expertise with the financial management of a divorce settlement.

ESTATE PLANNING CONSIDERATIONS

Divorce can disrupt estate plans, especially when a spouse is named as a beneficiary in a will or trust. In the event of a divorce, individuals often revisit their estate planning to ensure that their assets go to the intended recipients. A trust can be a useful tool here, allowing the settlor (the person creating the trust) to designate beneficiaries without worrying that their ex-spouse will inherit assets by default.

For example, if you have a living trust, you might want to ensure that your children or other family members inherit your assets, rather than your ex-spouse. Subject to the appropriate advice upon establishment, the settlor may able to exercise influence over the future distribution of assets upon death, providing a more secure alternative to a will, which may not be as flexible.


In Jersey, a trust can be structured to specify what happens to assets in the event of a divorce. This can be particularly important if you have complex assets, like a family business or real estate holdings, that you want to ensure pass to specific individuals after divorce.

TRUSTEE ROLE AND CONTROL

Another consideration when setting up a trust in Jersey is the role of the trustee. A trustee is the individual or entity that is responsible for managing the assets in the trust, ensuring they are distributed according to the terms of the trust. Choosing an independent trustee, such as a trust company or a trusted family advisor, can help ensure that the trust is managed impartially, without conflicts of interest. This can help avoid any disputes about the control or management of the trust assets, particularly in a contentious divorce where one party may try to influence the trustee’s decisions.


Moreover, the terms of the trust should clearly specify the trustee’s powers, duties, and how the assets should be distributed upon the occurrence of certain events, such as divorce. This can provide clarity and help ensure that the trustee knows exactly how to act in the event of a divorce.

LEGAL ADVICE IS ESSENTIAL

Given the complexity of both trust law and family law in Jersey, anyone considering a trust as part of their divorce strategy should seek professional legal advice. Trust law in Jersey has its nuances, and setting up a trust improperly could lead to complications in the divorce or could be challenged by the other party. A Jersey- based lawyer who specialises in both family and trust law can help ensure that the trust is properly set up, structured in a way that achieves the desired goals, and likely to withstand legal challenges during the divorce process.


As a fully independent trust company Forward Trustees Limited are in the perfect position to provide a corporate Trustee. Please do not hesitate to contact us for more information.

Published
September 2, 2025
January 25, 2025
Share this article