As many New Zealanders know, a family trust is a legal way to hold and protect your assets for you and your family for the future. The assets (properties/investments) will be owned by the trust rather than by a person, and they are managed by trustees. The trustees are usually family members but could be a professional person like a lawyer or accountant.
What many New Zealanders might not know, is that a recent Court of Appeal case has once again challenged the long held belief that a family home is untouchable to those outside of the trust in relationship property disputes.
In July this year, a case was heard between former couple Jane Murrell and William Hamilton. Both parties lived in Arrowtown in a property owned throughout their relationship by Hamilton’s family trust. During the course of their relationship, the house and landscaping were completed. Ms Murrell’s contribution to the overhaul of the property was assessed at 15% of its value, with a reasonable expectation of receiving an interest in the property. Murrell claimed she was owed this money by Hamilton. The Judge found in favour of Ms Murrell and she was awarded $37,500 for her share of the property. William Hamilton was also ordered to pay her costs. Click here to read the Judgement of the Court in full.
Aspiring Law commented, “This case sets an interesting precedent when it comes to family trusts. The commonly held belief is that anyone who owns or is part of a trust could relax, safe in the knowledge that their assets would remain safe within the trust if their relationship broke down. While there were some special circumstances in this particular case, it has emphasised the need to gain expert legal advice when it comes to setting up and managing a trust or you may not be able to rely on it.”
If you need advice on family trusts, get in touch with the lawyers at Aspiring Law, and get the lowdown on protecting your valuables and assets.