Although trust in the emotional sense is almost always an issue in family law, there is another, more technical use of the term that often crops up in family law. In legal terms, a “trust” is a situation where the bundle of rights that make up a piece of property are separated in some way. In a trust situation, while the legal ownership of the property vests in one person or group of people (the trustees) another person or group of people (the beneficiaries) have the right to all or part of the benefits associated with the property.
An express trust is a trust in which the person creating the trust has expressed an intention to have property held by one or more trustees for the benefit of the beneficiaries. An express trust can be often be encountered in family law situations when there are issues around estate planning, life insurance, family wealth planning, or in situations where the support of a person with a disability must be provided for.
Express trusts require careful drafting by a lawyer because the requirements to create a trust are very strict. There are also very high obligations on the people who act as trustees, because they have a duty of utmost good faith towards the beneficiaries and can only exercise their powers in within the limits of the trust.
Some trusts arise by operation of law. These trusts include resulting trusts and constructive trusts, which are usually encountered in family law in the context of disputes over property between spouses. These trusts can arise between spouses when one spouse has contributed to the acquisition, preservation, or maintenance of an asset that the other spouse or another person owns and has not received any sort of compensation for their contribution. They can also be encountered when property reverts back to an original owner because of some sort of defect in its transfer. Because married couples divide their property based on the Family Law Act, these trusts, especially constructive trusts, are most commonly encountered when spouses who were not married to one another separate.
Trust issues are generally very technical, and when they appear (whether in a family law case or otherwise) it is in your best interests to seek the advice of a lawyer in order to determine your rights and obligations.