Published on 01 May 13
by "TAXATION IN AUSTRALIA" JOURNAL ARTICLE
In recent years, there have been numerous developments which have challenged the effectiveness of trust structures, causing a loss of faith in the ability of traditional family discretionary trusts to protect assets in the event of marriage breakdown. The High Court decision in Kennon v Spry, in particular, appears to alter longstanding principles relating to the asset protection advantages of trusts in this context. This article considers the consequences of that decision, discusses the treatment of trust assets in a relationship breakdown and the distinction between assets forming part of the pool of property or being treated as a financial resource, examines the application of these principles in recent decisions, and offers some practical recommendations.
The authors conclude that, while this is an evolving area of law, recent case law indicates that, for the foreseeable future, well-structured trusts should continue to be an effective vehicle for asset protection and estate planning.
Click here to expand/collapse more articles by Tara Lucke.
Click here to expand/collapse more articles by Matthew BURGESS.