Corporate Trustees & Family Trusts In Australian Divorce And Separation
When your family’s future and assets are at stake, trust Queensland’s most experienced family law team. We protect your children, preserve your wealth and provide crystal-clear next steps.
⚡️ Urgent matters: Call 07 3172 3777
Complimentary 10-Minute Call with a Family Lawyer
By filling this in you are ok with us contacting you back by phone, sms or email, if you have a preference, please let us know.
QFLP helps Australians manage Divorce and Separation and Separation property settlements when assets are held in a trust with a corporate trustee. Courts look beyond labels to the family trust deed, the control of the trust and who benefits from the trust. We map what happens to a family trust in a Divorce and Separation, then design orders that include trust assets where appropriate or treat a trust as a financial resource. For tailored legal advice on your family law matter, contact QFLP for a confidential consult.
How courts view a corporate trustee in a Divorce & Separation
Courts assess whether trust assets will be considered by analysing control, benefit and the terms of the trust deed, not just the trust’s name.
Under section 79 of the Family Law Act, the Federal Circuit and Family Court of Australia identifies property, liabilities and financial resources before making just and equitable orders. In trusts in Australia, a trust is a legal structure. Assets may be owned by the trust and held by a corporate trustee, yet still affect the property pool in family law if a spouse controls distributions or uses the trust’s assets as if personal.
Example: when a spouse directs payments from a trust fund for family expenses, the trust is more likely to form part of the property to be divided.
Quick definitions
- Property: assets in a Divorce and Separation that can form part of the property pool and be included in a property settlement.
- Financial resource: a benefit a party may receive in future (for example, income of a trust) considered when adjusting proportions.
- Corporate trustee: the company that holds legal title and manages administration of the trust under the family trust deed.
Decision criterion: Do documents and conduct show a spouse can cause the trust to transfer assets and income now or soon?
Ownership control and benefit tests for a corporate trustee
Trust assets can be included where a spouse has practical influence over the trust and receives benefits from the trust, despite discretionary wording.
Courts examine the appointor of the trust, directors of the corporate trustee, voting power, and whether trust funds meet personal or family business expenses. If influence over the trust exists and the spouse regularly benefits, the trust will be included as property or weighed as a financial resource.
Example: a controlling interest in the trust via appointor rights and board control usually points to inclusion of trust assets in the property pool.
Indicators of influence
- Power to appoint or remove the trustee company
- Ability to decide distributions or veto resolutions
- Private expenses or loans paid from assets held in the trust
Decision criterion: Could the spouse redirect assets held in a trust or the income of the trust without another person’s agreement?
Common questions
Do trust assets form part of the property pool?
Often yes where control of the family trust and a pattern of benefit exist. Otherwise the trust may be considered a financial resource with an offset.
Are trusts protected from Divorce and Separation?
Not automatically. Trusts in Divorce and Separation turn on control, benefit and the trust structure. The Family Court has the power to include trust assets or adjust shares.
What if I am only a beneficiary of a discretionary trust?
Where there is no control and limited history of distributions, your interest in a trust may be treated as a resource rather than property.
Can a corporate trustee keep assets out of the pool of assets?
No. A company as trustee will not shield assets if a spouse effectively directs its decisions and benefits from the trust.
Roles that matter in a family trust
The appointor, the corporate trustee’s directors and key beneficiaries shape whether the trust is viewed as property or as a resource.
The appointor can usually hire or fire the trustee, which is a strong lever of control. Directors of the trustee company implement decisions and transact with assets owned by the trust. A beneficiary of a discretionary trust who routinely receives distributions demonstrates benefit.
Example: a wife’s interest in the trust as appointor and sole director, while family business shares are held in trust, can justify including trust assets in a property settlement.
Role map
- Appointor: controls who runs the trustee company.
- Trustee directors: authorise use and sale of assets and income.
- Beneficiaries: receive discretionary distributions of income or capital.
Decision criterion: Who can change the trustee or block a distribution today, and who actually benefits from the trust?
Evidence to gather before a family law property settlement
Clear documents let advisers determine whether trust assets should be included and the extent of the assets and income available.
Collect the family trust deed, all amendments and variation deeds, ASIC records for the corporate trustee, minutes, trustee resolutions, accounts, tax returns and loan ledgers. Records of how the family trust operates show whether the trust is property or a resource.
Example: resolutions allocating the income of a trust to one spouse during family law proceedings support inclusion or an adjustment in a Divorce and Separation settlement.
Document checklist
- Family trust deed and any changes to the terms of the trust deed
- ASIC extracts for the trustee company and share register
- Trustee resolutions, distribution statements and minutes
- Financial statements, tax returns and related-party loan accounts
Decision criterion: Could a forensic accountant rebuild the trust and its assets and income from the documents alone?
Valuing the trust fund and any family business
Valuation focuses on fair market value and sustainable income, including business goodwill and loans, not just book figures.
For a family business or investment portfolio held in a trust fund, experts weigh normalised earnings, market multiples, net asset value and contingent tax. Where money is owed to or from beneficiaries, loan accounts can affect value.
Example: a trust that holds investment property and runs a trading company may be valued on both assets and income, with the property’s equity and business profits feeding the outcome.
Valuation pointers
- Normalised earnings, market multiples and goodwill
- Net asset value, contingent tax and liquidity
- Beneficiary and shareholder loans affecting value
Decision criterion: What would a willing buyer pay today for assets held in the trust, net of costs and taxes?
Asset of the pool or financial resource to weigh
Trust assets may be included as property or treated as a financial resource depending on control, benefit and predictability of future flows.
If a spouse can cause distributions or sales, trust assets in the property pool are more likely. If the spouse is a remote beneficiary, the trust may be considered a resource and other assets will be adjusted.
Example: if trust assets are protected by independent controllers and no distributions flow, orders may favour the family home and super over a speculative share in the trust.
Inclusion snapshot
| Situation | Likely view | Practical outcome |
| Spouse controls trustee and is appointor | Property | Include trust assets or offset in the pool |
| Spouse is occasional beneficiary only | Financial resource | Adjust percentages elsewhere |
| Mixed roles with shared control | Mixed | Share income and adjust other assets |
Decision criterion: Is future benefit sufficiently reliable to treat the trust as property instead of a mere resource?
Orders that implement a workable Divorce and Separation property settlement
Orders can reassign control, direct distributions or split proceeds so assets to be divided are delivered without disrupting lawful administration.
Approaches include transferring or resigning appointor rights, changing the trustee board, fixing distribution percentages for a set term, or ordering sale of particular assets held in the trust.
Example: consent orders may direct the trustee to pay a fixed annual amount from the income of a trust until an agreed sum is reached, balancing cash flow and fairness.
Mechanisms to consider
- Appointor and director changes with deadlines
- Fixed or minimum distributions for a period
- Sale or refinance instructions for named trust assets
Decision criterion: Do orders deliver cash or control changes while respecting how the trust is viewed under its deed?
Support payments and income of a trust
Trust distributions can increase capacity to pay spousal maintenance, and irregular flows may justify review clauses.
If a party benefits from the trust through regular distributions, that income can be counted in support. Where distributions vary, annual true-ups help keep payments fair.
Example: the payor spouse whose dividends and trust distributions spike with business profits may agree to disclose accounts each year and adjust support accordingly.
Practical settings
- Annual disclosure of trust accounts and distributions
- True-up mechanism for variable trust income
- Caps or floors to manage volatility over time
Decision criterion: Does the pattern of trust income support clear, reviewable maintenance orders?
When inclusion may not be the right fit
Sometimes interests are too remote or speculative to justify inclusion as property.
If a spouse has no control, receives no distributions and the class of beneficiaries is wide, the trust may be considered only as a financial resource. For modest trusts, expert and legal costs can outweigh likely gain.
Example: where a distant relative is a discretionary beneficiary but has not received a distribution for years, inclusion may not be warranted.
Watch-outs
- No appointor power and no board role
- No distribution history or access to information
- High expert cost compared to expected value
Decision criterion: Are compliance and valuation costs disproportionate to the likely share in the trust?
How to judge if you need action now or later
Move quickly when changes could shift value or control in the event of a Divorce and Separation.
Act if an appointor change is proposed, if the trustee plans asset sales, if loan accounts may be called, or if vesting is near. Conduct within and around separation, including actions affecting the trust until three years back, may attract scrutiny.
Example: pausing restructures and preserving minutes can prevent disputes about attempts to hide assets or protect assets in a Divorce and Separation unfairly.
Prioritise now if
- Appointor or director changes are imminent
- Asset sales, refinances or vesting dates approach
- Related-party loans move materially
Decision criterion: Could planned trust actions reduce the pool this quarter or frustrate orders?
Where this connects to your broader Divorce and Separation property
Trusts sit alongside the family home, superannuation and personal investments in the overall property division.
Align treatment of assets held in a trust with business valuations, super splitting and debt allocation so the settlement remains just and equitable.
Example: parties may keep control of the family business held in the trust while adjusting home equity to balance contributions and future needs.
Connected topics
- Property pool in family law and contributions
- Consent orders and enforcement pathways
- Business and share valuations with trust structures
Decision criterion: Do orders across all assets produce a practical, enforceable outcome for both parties?