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Clayton v Clayton and Trusts

By Lewis Grant - 9 Mar 2015

The headlines relating to the Clayton v Clayton case, the judgment for which the Court of Appeal released in early March 2015, read "Ruling Redraws the Landscape" and "Divorce Case Throws Doubt on Trusts' Status". Among other things, the Court held that Mr Clayton's right to remove discretionary beneficiaries, and therefore leave himself as the sole person entitled to receive income and capital from the trust, could be property and therefore relationship property. It also held that the value of that relationship property was the net value of the trust's assets.

In most of the trusts that we prepare for couples, those trusts give the powers to remove discretionary beneficiaries to the couples jointly and then upon the death of one of them the power no longer exists. The power is not vested in one of them only and does not remain with one of them only on the death of the other.

Therefore, in respect of most of the trusts of our clients, the Court of Appeal's decision in Clayton v Clayton will not apply.

Please contact us if you would like to discuss your trust further.


Lewis Grant


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