Family Law Newsletters
Are trusts that interfere with the health of a marriage, valid?
There are many things in life that have the potential to impede with harmonious family relations, and arguably, one of the biggest issues that may interfere with the well being of a marriage, or family unit, may be issues related to trusts. Broadly speaking, trusts that interfere with the sanctity of a marriage (or family relationships) will be viewed as void by the courts. Conversely, although trusts that interfere with the sanctity of a marriage or familial relationships may be seen as void by the courts, case law has not always been as straightforward as we may assume in this respect, and there are many caveats that need to be taken into account when analysing trusts that may disturb the health of a marriage or family.
What type of trusts may be void for interfering with a marriage?
Restating the earlier point, trusts that are created which disturb the welfare of a marriage will usually be considered as void. However, case law can be seen in some regards as inconsistent in the application of voiding trusts that impede with the sanctity of a marriage or family relations.
Trusts that require a person to separate from their spouse in order to receive a benefit for example, have for the most part been considered void, due to the fact that it may encourage a beneficiary to initiate an action of divorce from their spouse. However, the High Court in Ramsay v Trustee Executors and Agency Co Ltd arguably took a different approach, and upheld testator’s wish that his son will be entitled to the trust estate if he is no longer married to his spouse – with the Court ruling that this stipulation did not offend public policy.
Furthermore, recent rulings have also followed the approach of the High Court in Ramsay, which makes the principle rather interesting to say the least.
Public policy considerations
In regards to public policy considerations, the law generally views clauses that require forfeiture of a life estate as an antithesis to public policy. But in contrast, trusts that places a reliance on the beneficiary to marry to receive a trust, has been upheld as valid by the courts.
Furthermore, public policy dictates that any trust which is constructed in a manner that would result in the separation between a parent and a child will be void. Interestingly, clauses that define how a child should be raised – such as in relation to their religious upbringing – may not necessarily be considered as void by the courts under certain circumstances.
The courts will generally try to balance public policy considerations when deciding whether or not a trust is void, because it may disturb the wellbeing of a marriage as well as fulfilling the wishes of the person to dispose their property as they see fit.
So as you can see, there are many factors that need to be taken into account before the courts will decide to consider a trust void.
