Can a Trust Protect Assets From Divorce?

A trust can protect assets from divorce, but not automatically. Whether trust assets are shared depends on who set up the trust, when, why, and whether the trustees are likely to pay money out to the spouse who benefits.

Moving assets into a trust shortly before or during a divorce will rarely protect them, because the court can undo the transfer.

If you are divorcing and you, or your spouse, benefit from a trust, you may be worried about what happens to it.

This guide explains how the courts in England and Wales deal with trusts in a financial settlement, when a trust will and will not be protected, and the steps that genuinely help. The rules in Scotland, the US and elsewhere are different.

What is a trust?

A trust is an arrangement where one or more people (the trustees) legally own assets and manage them for the benefit of others (the beneficiaries). The person who puts the assets into the trust is called the settlor.

A trust is not a company or a separate legal person. The trustees hold the assets in their own names, and they must follow the trust deed and their legal duties as trustees.

This matters in a divorce. If you are a beneficiary, you usually do not own the trust assets. But the court can still take your interest in them into account.

Are trusts protected from divorce?

Not automatically. When a court divides finances on divorce, it must consider all the property and financial resources each spouse has, or is likely to have in the foreseeable future. This duty comes from section 25 of the Matrimonial Causes Act 1973.

The court usually asks three questions about a trust:

1. Is it a “nuptial settlement”? If so, the court can change the trust itself.
2. Is it a resource the beneficiary spouse can realistically draw on? If so, the court can take it into account when deciding what each spouse receives.
3. Were assets put into the trust to defeat the other spouse’s claim? If so, the court can undo the transfer.

The answers depend on the facts. The same kind of trust can be treated very differently in two cases.

How are different types of trusts treated in a divorce?

Nuptial trusts

A nuptial settlement is a trust that makes continuing provision for one or both spouses as spouses. There is no statutory definition. The test comes from case law, and courts look at the reality of the arrangement rather than the label on the deed.

A trust set up by a married couple for themselves and their children is a typical example. A trust created before the wedding can also be nuptial, because the law expressly covers “ante-nuptial” settlements. A vague intention to benefit the couple one day is not enough, though.

If a trust is nuptial, section 24 of the Matrimonial Causes Act 1973 gives the court wide powers. It can:

• vary the trust, for example by adding the other spouse as a beneficiary
• reduce or remove either spouse’s interest under it
• in practice, restructure the trust so that assets pass to the other spouse as part of the settlement

Family and inherited trusts

Many trusts are set up by parents or grandparents to keep wealth in the family. These trusts are usually not nuptial. They are normally treated as non-matrimonial property, meaning assets that came from outside the marriage. We explain the difference in our guide to matrimonial and non-matrimonial assets.

In Standish v Standish (2025), the Supreme Court confirmed that the principle of sharing assets equally applies only to matrimonial property. That is good news for a beneficiary of a family trust. But it is not complete protection, for two reasons:

• The trust can still be counted as a resource. If the trustees would be likely to pay out if asked, based on the trust deed, any letter of wishes and how the trust has been used in the past, the court can treat it as money available to that spouse.
• Needs come first. If the other spouse’s reasonable needs cannot be met from the other assets, non-matrimonial property, including trust assets, can be used to meet them.

The court cannot order the trustees of a family trust to pay out. Instead, it makes an order against the beneficiary spouse, set at a level that assumes the trustees will help.

The more a trust has funded the family’s home and lifestyle, the more likely this is. Our article on extended family wealth and divorce looks at a recent example.

Discretionary trusts

In a discretionary trust, the trustees decide who receives what and when. No beneficiary has a fixed right to anything. You can read more in our guide to discretionary trusts.

This gives stronger protection than a trust where a spouse has a fixed entitlement. But it does not put the assets beyond reach. If the trustees have regularly paid out to the beneficiary spouse, the court may decide they would be likely to do so again.

Offshore trusts

Many trusts are held in places such as Jersey, the Isle of Man or the Cayman Islands. Some of these have “firewall” laws. Jersey’s law, for example, says questions about a Jersey trust are decided under Jersey law, and a foreign court order varying the trust will not be enforced there.

A firewall stops an English order being enforced against the trust directly. It does not stop an English court counting the trust as a resource, or making orders against the spouse personally. Cross-border cases need specialist advice from international divorce lawyers early on.

Can I put assets into a trust before a divorce?

Moving assets into a trust shortly before or during a divorce is very unlikely to protect them.

Under section 37 of the Matrimonial Causes Act 1973, the court can stop a transfer that is about to happen. It can also set aside one already made, if it was made with the intention of defeating the other spouse’s financial claim. This applies to gifts and transfers into trust, including transferring the family home.

The court presumes that intention if the transfer was made less than three years before the application and would defeat the claim. It is then up to the spouse who made the transfer to prove otherwise.

The main exception is a transfer made for value, such as a genuine sale, to someone acting in good faith who did not know of the intention. Putting a house into a trust for your children is not a transfer for value.

The transfer must also be disclosed. Hiding it can lead to costs orders and, if discovered later, the settlement being reopened.

What is a sham trust?

A sham trust is one where the documents do not reflect what was really agreed. Both the settlor and the trustees must have intended the trust deed to give a false picture, for example where the “trust” is really the settlor’s own money and the trustees simply do what they are told.

A trust is not a sham just because one spouse hoped it would reduce the other’s claim. That situation is dealt with under section 37 instead.

Proving a sham is difficult and needs evidence. In one case our family team won, the judge rejected a husband’s claim that around £38 million was held on trust for others. The wife was awarded £15 million. You can read about it in our case study, wife awarded £15m after sham trust exposed.

Do I have to disclose a trust in divorce?

Yes. Both spouses must give full and frank financial disclosure, usually on Form E. Form E asks specifically for trust interests, including interests under a discretionary trust, with an estimate of value and when the interest is likely to be paid out.

This applies even if you believe the trust will not be counted. The court decides whether it counts, not the beneficiary. Failing to disclose a trust interest can damage your credibility and lead to the settlement being set aside. See our guide to financial disclosure in divorce.

Will the trustees be involved in the divorce?

Sometimes. If one spouse asks the court to vary a nuptial settlement, the application must be served on the trustees and on the settlor, if they are alive. The trustees can also be joined as parties to the proceedings, which means they can take part and be bound by the court’s decisions.

Trustees must act in the interests of all the beneficiaries, not just one spouse. They often take their own legal advice.

How can you protect an inheritance or family wealth from divorce?

No arrangement is guaranteed to work. But several steps make protection much stronger.

Leave assets in a discretionary trust

Parents who want to protect an inheritance for a child can leave it in a discretionary trust in their will, rather than as an outright gift. The trustees then control when and how money is paid out. Our guide to will trusts explains how these work.

Keep trust money separate

Trust money that is used to buy the family home or fund day-to-day family life is more likely to be treated as shared. Keeping trust and inherited assets separate from joint finances gives the strongest argument that they should stay with the beneficiary. Our case study on how assets can become matrimonial shows what can happen when they are mixed.

Make a prenuptial or postnuptial agreement

A prenuptial agreement or postnuptial agreement can record that trust and family assets are to stay with the beneficiary. These agreements are not automatically binding in England and Wales. But courts will usually uphold a fair agreement that both people entered freely, with full disclosure and legal advice.

Could the law change?

The government consulted in 2026 on reforming the law on finances after divorce, including proposals to make certain nuptial agreements binding. The consultation closed on 14 August 2026 and no decision has been announced. For now, the current law applies.

How we can help

Our family law team regularly advises on divorces involving trusts, family wealth and inherited assets, both in the UK and overseas. We work with the firm’s trusts and estate planning lawyers where the structure of a trust matters, and with specialists abroad where a trust is held offshore.

Whether you benefit from a trust, suspect assets have been moved into one, or want to protect family wealth before a marriage, we can explain your options and the likely outcome. Find out more about our high net worth divorce work.

Call us on 020 7485 8811 or fill in the contact form below.