By Lewis Grant - 9 Mar 2015
The headlines relating to the Clayton v Clayton case,
the judgment for which the Court of Appeal released in early March
2015, read "Ruling Redraws the Landscape" and "Divorce Case Throws
Doubt on Trusts' Status". Among other things, the Court held that
Mr Clayton's right to remove discretionary beneficiaries, and
therefore leave himself as the sole person entitled to receive
income and capital from the trust, could be property and therefore
relationship property. It also held that the value of that
relationship property was the net value of the trust's assets.
In most of the trusts that we prepare for couples, those trusts
give the powers to remove discretionary beneficiaries to the
couples jointly and then upon the death of one of them the power no
longer exists. The power is not vested in one of them only and
does not remain with one of them only on the death of the
other.
Therefore, in respect of most of the trusts of our clients, the
Court of Appeal's decision in Clayton v Clayton will not
apply.
Please contact us if you would like to discuss your trust
further.
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Lewis
Grant