Divorcing Beneficiaries - A Practical Guide For Trustees
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...
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