What is property and who owns the property for the purposes of the Family Law Act?

Trust Property and Ownership in Family Law

Appearances can be deceptive when it comes to ownership. Control of property does not always mean legal ownership.

What is property under the Family Law Act?

Section 4 of the Family Law Act defines “property” broadly. It includes real estate and personal assets.

It also includes furniture, money, shares, partnership interests, licences, contractual rights, debts, and interests in trusts. The definition covers a wide range of assets.

Who owns the property?

The key issue is whether a beneficiary of a discretionary trust can claim trust assets as their own property.

Courts also consider whether a party in family law proceedings can deny ownership of trust assets when they control the structure.

Control alone does not automatically create ownership. The court examines the legal rights created by the trust deed.

What the court decided

In Harris & Dewell (2018), the Full Court of the Family Court clarified how trust control operates in property disputes.

The court held that control of a trust does not, by itself, establish ownership of trust property.

Even if a husband acts as trustee, this does not automatically mean he owns the assets. Legal control on paper can differ from beneficial ownership under the deed.

The court instead looks at whether a person controls someone who can obtain a beneficial interest in the trust property under the trust deed.

In this case, the father of the husband controlled the trust. He also held the sole unit interest and could direct benefits from the trust.

Although the husband appeared to control the trust, the deed showed otherwise. The court found that the trust property belonged to a third party, not the husband.