The relevance of "trust" assets upon divorce

Abstract

The purpose of this study is to determine under which circumstances trust assets will become relevant in divorce litigation where the spouses are married in community of property. The study commences with a discussion on the law of divorce and specifically the forfeiture order under section 9(1) of the Divorce Act. The purpose of this discussion is to determine the factors which a court will take into consideration when making a divorce order. The attention of the study then shifts to the law of trusts. The chapter is mainly focussed on the separation of control and enjoyment and the importance of distinguishing between lifting and piercing the veil of the trust. The concepts of alter-ego and sham trusts are then discussed separately. The chapter concludes with a recommended process which courts could follow when faced with the question of whether trust assets should become relevant at divorce proceedings of spouses married in community of property. The study then discusses the recent case of WT v KT, which dealt with the topic of this study. The theory laid down throughout the study is then used to critically evaluate the judgment and identify any points which the court may have failed to identify. The recommended process mentioned above is then used to determine whether it would have delivered a different result in casu. The study concludes by answering the research question with specific reference to the case of WT v KT by concluding that, as a result of the judgment, trust assets will not be relevant at divorce proceedings of spouses married in community of property. This position is criticised and certain recommendations, aimed at ensuring that trust assets remain within the trust, are formulated.