Husband Loses Appeal Over £7 Million Trust Fund Assets

A husband has lost his appeal against an order made in July 2010 for ancillary relief (the legal term for financial provision for an ex-spouse) that put family assets of £10 million, including £7 million held in two trusts, into the pool of ‘matrimonial assets’ to be split between him and his ex-wife. The Court of Appeal rejected the husband’s argument that most of the trust assets were not available to him.

The case concerned a Mr and Mrs Whaley, who married in 1987, after two years of cohabitation, and separated in 2008. The couple had four children, now aged between 12 and 20, and owned homes in Spain and England. Mrs Whaley and the children spent most of their time in England, joining Mr Whaley in Spain during school holidays.

During the earlier hearings, the couple’s estimates of their assets varied widely, with Mr Whaley estimating that the total assets were worth just over £3 million and Mrs Whaley valuing the assets at almost £12 million. The judge settled the valuation at around £10 million and made the asset division order accordingly. Mr Whaley appealed against the order on the grounds that some of the assets had been overvalued, some were held in trusts over which he had no control and were not therefore available to him, and the assets he would be left with would be illiquid. This would mean, he argued, that he would have to sell his home in order to meet the payments to his former wife.

The first of the two trusts, known as the ‘Farah Trust’, was set up by Mr Whaley’s parents in order to secure the future of their children. They had also created a second trust, the ‘Yearling Trust’, as a sub-trust of the Farah Trust, ostensibly to provide for their grandchildren – Mr Whaley’s four children and the four children of one of his brothers. The trial judge, however, had found sufficient evidence that Mr Whaley had access to the assets of both trusts to consider them resources likely to be available to him.

The Court of Appeal rejected Mr Whaley’s arguments and held that the judge in the earlier proceedings had been right to form the conclusion that the trustees of the two trusts would be likely to make the assets available to Mr Whaley if he required them. The Court also made further comments regarding the lack of precise information about the legal framework of some of the assets. Mr Whaley’s appeal was duly dismissed.

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