If you have a family trust, it’s natural to assume it offers robust protection for the assets of the trust, even in the case of relationship breakdown.

Don’t assume your trust is an impenetrable shield, as family courts in Australia have significant powers to look behind a family trust’s structure.

When a relationship breaks down, seemingly protective structures such as family trusts can take centre stage.Credit: Suzanne White

Family trusts are a common feature in many people’s financial lives, to manage wealth, protect assets and plan for the future across generations.

Whether established long before a relationship began, during it, or by parents and grandparents as part of their estate planning, family trusts are usually designed with deliberate intentions.

Treasury’s 2024 Tax Expenditures and Insights Statement (TEIS) indicates more than one in 10 Australians lodging a tax return report that they are receiving trust-fund income.

So, it’s important for people to be fully informed if they plan to establish a family trust.

Family trusts, also known as discretionary trusts, are a legal arrangement where a trustee agrees to hold assets on behalf of beneficiaries. Trusts can provide asset........

© The Sydney Morning Herald