Caveat lodged by former spouse against trust property to protect her interests, pending her constructive trust claim…

In a recent High Court case a spouse had lodged a caveat against a property owned by two family trusts in half shares.  The caveat was lodged to protect the spouse’s constructive trust claim after she was removed as a beneficiary of the family trust.

The trustees had then lodged an application that the spouse’s caveat lapse.

The former spouse argued that she had a reasonable expectation of an interest in the trust property as she had contributed to the property in more than a minor way by helping fund the purchase and helping with maintenance and improvement costs.

She successfully argued that:

• it had been acknowledged by the trustees of one of the trusts that she would eventually inherit 30% of the trust property; and
• from her separate earnings she made significant contributions to the property over and above the benefit she received as an occupier of the property.

The Court granted the former spouse’s application that the caveat not lapse, whilst her constructive trust claim was dealt with by the Court.

If you have contributed to trust property during a relationship, or believe you may have a claim against a trust, it is important to take advice early so that your interests can be protected.

Trustees should obtain early advice on as to what steps can be taken to avoid a constructive trust claim in the future.

Leading law firms committed to helping clients cost-effectively will have a range of fixed-price Initial Consultations to suit most people’s needs in quickly learning what their options are.  At Rainey Collins we have an experienced team who can answer your questions and put you on the right track.