A Matter of Trust

10 November 2010

It has been reported this weekend that the wife of a City trader is seeking a share of the £7.5 million which he transferred to Lichtenstein companies during the course of the marriage. Mr Goldstone and the companies maintain that the assets were legitimately transferred. Mrs Goldstone meanwhile alleges that, far from having transferred ownership in these assets, her husband still retains control of and a beneficial interest in them and she is therefore entitled to a share of those funds as part of her financial claim upon divorce.

Lord Justice Thorpe has directed that the case should be heard by the Court of Appeal in the hope that guidance will be provided for cases of this type which are becoming increasingly common. It is hoped that guidance will be provided for situations where a wife needs to make claims against a third party holding the assets when her actual claim lies against her husband. The current need for a party to litigate on two fronts brings with it significant costs implications.

Mr and Mrs Goldstone’s case exemplifies a theme of recent litigation upon divorce: while the starting point for division of assets following a long marriage has become an equal division between the parties (subject to limited exceptions), litigation over the value or existence of assets to be divided has increased. However, even if Mrs Goldstone is successful and the Court concludes that the offshore assets are held on trust for her husband and she is entitled to a share, she may yet face an uphill struggle enforcing that order.

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