Divorcing Beneficiaries - A Practical Guide For Trustees

Author:Miss Joanna Woods
Profession:BakerPlatt
 
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The Problem

A Jersey law trust. A Jersey corporate trustee. Divorcing

beneficiaries, both of whom are resident in a foreign jurisdiction.

What should you do? What shouldn't you do?i

You will need to consider three matters:-

Provision of information

Submission to the jurisdiction of the foreign Court

Enforcement of judgment in Jersey

Provision Of Information

Disclosure of trust documentation falls under the inherent

jurisdiction of the Court to supervise the administration of the

trust.ii It is therefore advisable to seek a directions

hearing in front of the Court for endorsement of any decision as to

the documents you intend to disclose and documents you intend to

withhold.

You should bear in mind the following:-

A beneficiary will normally be entitled to see:-

The trust deed

Accounts of the trust, which may include accounts of underlying

companies

Bank statements

Portfolio valuations

A trustee is entitled to withhold disclosure of documents that

reveal how they deliberate or how they exercise their discretion,

unless the Court orders there is good reason to make

disclosure.iii This will normally include:-

The Letter of Wishes

Minutes of trustee meetings

If there is any indication that a beneficiary or stranger to

the trust intends to use the information to attack the trust

– for example by asserting the trust is a sham

– disclosure of information may be

withheld.iv

The Court will normally order the provision of the fullest

information to assist the foreign Court in determining how to

divide matrimonial assets.v

In some circumstances the Court will order disclosure of

information which is normally confidential, for example an old

Letter of Wishes may already be in the possession of a spouse and

it might be in the best interests of the trust to ensure the

foreign Court has the most up to date version.

Submission To The Jurisdiction

It is advisable to seek directions from the Court to approve any

decision you reach whether to submit to the jurisdiction of the

foreign Court.

Ordinarily the Court will order the trustee not to submit to

the jurisdiction of the foreign Court.vi As a matter of

private international law, submission to the jurisdiction by the

trustee may make the judgment of the foreign Court automatically

enforceable in Jersey. A trustee is therefore normally advised not

to submit, so that it will remain a matter of discretion for the

trustee and the Jersey Court whether to give effect to the foreign

judgment.

A failure to seek directions before submitting to the

jurisdiction from the Court may...

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