A couple were separating after 17 years of marriage.  During the marriage, one partner created a family Trust.  While that person was a beneficiary of the Trust, the other party was neither a trustee nor a beneficiary, and she is therefore not entitled to any trust property under the trust deed.  This is very distressing to her because the trust owns the home that the parties have been living in during the relationship and which had previously been owned jointly.  The wife was convinced to sign over the house to the Trustees, because she was told it would protect their house from creditors.  If it was not for the Trust, the home would have been relationship property, and she would have been entitled to a half share of the home. 

After taking advice from a lawyer, the wife realised that all is not lost.  Under the Property (Relationships) Act 1976 the Court has the following powers:

  1. The Court can require a person to provide information about the disposition of relationship property, by either or both parties, to a trust during the marriage.
  2. The Court can make an order to compensate a party who has been deprived of their share of relationship property, as a result of a disposition to a trust (either by having property transferred to them, or with a lump sum, or future income).
  3. Where the disposition was made deliberately to defeat the rights of a person, the Court may order a party who knowingly had property transferred to them, to transfer the property to someone else, or to pay compensation to the person who was deprived of property.

In this case the parties both received legal advice, and realised that it would be mutually beneficial to wind up the trust and distribute the assets of the trust equally..

Please note that Rainey Collins is not contracted to provide Legal Aid, other than in the Treaty of Waitangi area.  We therefore are unable to take on any Civil or Family Legal Aid work. If you require Legal Aid in those areas, you can search the list of Legal Aid lawyers on the Ministry of Justice website.