Protecting assets from divorce—trusts and nuptial agreements: offshore trusts and community property

摘要

The Supreme Court’s decision in Radmacher v Granatino gave a cautious green light to pre-nuptial agreements. It explains that provided safeguards are followed, they ought to be given effect. We consider whether—in order to make offshore trusts ‘divorce proof’, following the decision of the Jersey Court of Appeal in IMK Trust: Mubarak v Mubarik—the fashion for wide discretionary trusts will give way to narrower powers which prevent trustees giving effect to orders of the English court exercising its ancillary relief jurisdiction. We consider community property rights—and their impact on offshore trusts. It is not as simple as saying ‘just because on dissolution of the community spouses have a monetary claim, their rights are necessarily personal’. Even if they are non-proprietary they may be recognized under an express or implied contract. Once on notice, such rights could expose trustees to personal liability.