In the recent decision of TP v TF [2026] EWFC 210 the Family Court grappled with questions including:
Identifying not only the source of wealth, but how wealth is used, managed and developed during a marriage
whether family Trust structures should be taken into account when determining financial resources
whether Trust assets were capital resources available to one of the parties
whether they constituted, in whole or part, ‘matrimonial assets’
the extent to which the sharing principle should apply
Let’s break this down.
Why Trusts are valuable wealth protection and estate planning tools
Trusts can be a useful way of protecting family wealth for future generations. Trusts are commonly encountered as part of family estate and succession planning, to help protect beneficiaries’ interests.
What is a Trust?
A Trust is a legal arrangement where ‘Trustees’ manage assets for the ‘beneficiaries’. Trustees act in a ‘fiduciary’ capacity. There are many types of Trusts, which have different purposes. Trusts can be created in lifetime or by a person’s Will. Trustees often have to balance the competing interests of different beneficiaries.
Why are Trusts used?
An important benefit of using a Trust is that the trustees usually retain control of the assets. This can be useful where a beneficiary is not able to manage money for themselves, for example due to young age, incapacity, vulnerability or financial immaturity.
Discretionary Trusts
A Discretionary Trust is a specific type of Trust. One key feature of a Discretionary Trust is that the assets in the Trust do not belong to any of the beneficiaries. The beneficiaries have no automatic right to receive any income or capital from the Trust. Instead, there is usually a list of potential beneficiaries and the Trustees have the discretion to decide which of those become beneficiaries. It is entirely at the Trustees’ discretion to decide who benefits, when and in what way from the assets held in the Trust.
This can be beneficial, for example, if an intended beneficiary is unable to manage their finances and may welcome some assistance with managing a significant amount of money. A Trust can also allow for multigenerational planning, enabling the Trustees to ‘skip’ generations if it is appropriate or tax efficient to do so.
A Trust can sometimes offer more protection from claims by former spouses or creditors of beneficiaries in the event of future divorce or financial difficulties as they can provide a means for the Trustees to defer an actual benefit until a beneficiary is in a more secure position.
However, using a Trust does not guarantee that funds will be disregarded in any divorce proceedings.
How does the family court approach a financial settlement?
On a divorce, the court looks to reach a fair solution for a financial settlement. It does so with reference to the resources of the parties, from all sources and worldwide and by applying the criteria set out in s25 Matrimonial Causes Act 1973.
Key principles developed through case law include:
Meeting ‘Needs’
‘Sharing’ and
‘Compensation’
How are different resources treated?
In the recent decision of the Supreme Court in Standish v Standish UKSC/2024/0089 said that:
Non-matrimonial property “… is typically pre-marital property brought into the marriage by one of the parties, or property acquired by one party by external gift or inheritance”
and
Matrimonial property ..”is property which comprises the fruits of the marriage, reflects the marriage partnership or is the product of the parties’ common endeavour”.
What does this mean in practice?
In simple terms, if an asset is ‘matrimonial’ it means that it has been built up or acquired during a marriage. As a result, the starting point is that the spouses should share equally in all matrimonial property, subject to the criteria in s25 Matrimonial Causes Act 1973 to achieve a fair solution.
Again, in simple terms, if an asset is ‘non-matrimonial’ it means that is has been brought into the marriage by one spouse only. Examples of what may be argued as non-matrimonial resources might be assets acquired before the marriage or relationship, or those generated after it has ended, or assets gained through inheritances or gifts.
Non-matrimonial assets are less likely to be shared – equally or otherwise. It may be possible to argue that that a ‘non-matrimonial’ resource should be ring-fenced or otherwise preserved for the party bringing it into the marriage.
Whether an asset is ‘matrimonial’ or ‘non-matrimonial’, a divorce settlement is always subject to the court’s discretion and the issues outlined in s25 Matrimonial Causes Act 1973.
Matrimonialisation: Whether a non-matrimonial asset has been subject to ‘matrimonialisation’ involves considering how the parties have been dealing an asset and whether this shows that, over time, they have been treating that asset as shared between them.
If there is insufficient wealth, it may not be possible to “ring-fence” or protect ‘non-matrimonial’ assets. But for wealthy individuals, the distinction between what is capable of being shared as matrimonial assets – or not – and if capable of sharing – how - is crucial to the ultimate settlement.
Which neatly takes us to this recent decision of Mr Justice Garrido in TP v TF.
How have Trusts traditionally been treated on divorce?
This is a complex area of the law, and this article is intended to give an overview of the likely issues.
Each case is highly specific.
Duty of disclosure
In general terms there is a duty within divorce proceedings to disclose any interest in a Trust. How it comes into play in the settlement will depend to a large extent on:
The nature of the Trust
Whether it can be said to have what we call a ‘nuptial element’
The powers afforded to the Trustees
The extent to which the Trustees have exercised their discretion in favour of the beneficiary prior to a divorce.
In some circumstances Trustees can be joined into divorce proceedings and asked to explain distributions or produce documents.
Nuptial elements of a Trust
If a Trust can be said to have a ‘nuptial element’, ie a settlement made during the course of or in contemplation of a marriage, which benefits one or other spouse, it is likely to be viewed by the court as a nuptial agreement and capable of variation by the family court.
Even if a Trust is not nuptial as such, and so cannot be varied, it is still a resource of the beneficiary to which the court will have reference.
Source of funds
A court will be quick to infer it as a source of funds if there is a pattern of the Trustees having paid out income or capital to a party.
In some cases, even if there is no track record of payments, courts have been known to give judicial ‘encouragement’ to the Trustees to exercise their discretion in favour of a spouse, to reflect the potential resource available to them, and for example, raise funds to pay the other spouse a settlement.
What were the key issues in TP v TF?
Whether certain Trust assets were capital resources available to the husband
Whether the husband could realistically benefit from Trust assets if he sought assistance from the Trustees.
If so, what was their net value?
To what extent did they constitute matrimonial assets to which the sharing principle applied.
Should sharing be equal?
What did the Judge decide?
After reviewing the evidence, the judge concluded that a substantial part of the Trust wealth was effectively available to him.
The Court found that the Trust’s purpose was to reward the husband for his endeavours on behalf of his family within the business.
The Court further held that he was supported in those endeavours by his wife.
The Court found that the entire net value of the CAP was matrimonial, and so approximately £114.5 million, representing an equal division, was ordered to be paid to the wife.
Issues to consider in collaboration with Private Wealth Advisors
Working with different disciplines, including family and private wealth lawyers, careful planning and careful ongoing management of the Trust is required.
Issues may be:
Why was the asset or allocation created?
Consider the purpose of the Trust carefully.
Consider at the outset whether the Trust should notionally ear mark resources and the implications.
When was the Trust set up and how much of that timescale overlaps with the marriage?
Are Trust funds realistically available to the beneficiary?
This case illustrates that Trust assets may move towards matrimonial property where a beneficiary has enjoyed consistent access to Trust wealth over many years.
Consider whether to make distributions and review the likely implications if they are made.
Regular distributions, and a history of Trustees facilitating requests for capital and the use of Trust assets to support the family's lifestyle may all point towards the Trust operating as a practical source of family wealth rather than a remote contingent benefit.
When considering whether a Trust is a resource to a party in financial proceedings on divorce, the question for the court is whether, if that party were to request it, the Trustees would be likely to advance to them the whole or part of the Trust’s assets now or in the foreseeable future?
This is known as the Charman question.
Has there been involvement or enjoyment of the resource by both parties during the marriage?
In this case, both parties were involved with, or supported, to differing extents, the business and the husband’s role within it.
This is likely to be highly fact specific.
Have resources received from the Trust been merged or mingled with other ‘matrimonial assets’?
How did the parties treat the resources that they benefitted from?
Discretionary Trusts
If there is a Discretionary Trust, will a wide class of beneficiaries other than a married member of the family and their spouse for example, help arguments against it not being nuptial / linked to a marriage
In some cases, consideration could be given to exclude provision for spouses and possibly provide for provision to pass straight to the next and future generations instead.
However, even if a Trust deed may confer broad discretion on Trustees, if the evidence demonstrates that requests for funding were routinely granted over many years, a court may conclude that the beneficiary enjoyed effective access to the Trust's assets.
The issue for the family court is access to funds, not control of the resource.
Day to Day Trust administration
What will the Trust documents, letters of wishes, correspondence and distribution history demonstrate?
How are decisions reached by the Trustees?
How are they recorded?
Careful notes should be kept.
Ongoing review of changing family dynamics
Consider succession planning, marriages and new relationships, and protective measures that may assist as they arise.
Pre and post nuptial agreements can be extremely useful to stress intentions for resources to be ‘non-matrimonial’ in nature.
Disclosure obligations on divorce
If a divorce is likely, consider the extent to which the Trustees will support disclosure obligations.
Consider jurisdictional issues if the Trust is offshore.
In TP v TF, the court had concerns about how certain Trust interests had been disclosed and characterised during the proceedings.
Summary
Expert advice is always required when consideration is given to the creation of a Trust and its ongoing administration.
This case raises important questions for Trustees, protectors, family offices, wealth managers, and the many other professionals advising HNW and UHNW families in respect of their Trust arrangements
Although no structure is guaranteed, careful planning may strengthen the evidence that an asset was intended to remain non-matrimonial on a future divorce.
Weightmans advise clients on all aspects of Trusts and inherited wealth, not only the benefits of settling assets in Trust but helping them identify other issues that may arise in due course. We also advise Trustees on the management of Trusts to ensure they fulfil their fiduciary duties and act within the scope of their legal powers.
For a broader consideration of how inherited wealth on divorce is considered see: How an inheritance is dealt with on divorce.
For more information on wealth protection and estate planning , please speak to our expert family solicitors.
Family law
