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

Appearances can be deceptive as to ownership.

What is property?

Section 4 of the Family Law Act defines “property” to include real estate and personal property such as furniture and furnishings, money, shares, interests in partnerships, licences, rights pursuant to contracts, debts and interest arising under trusts.  The list may be considered as almost limitless.

Who owns the property?

The important issue is then to consider as to whether a designated beneficiary under a discretionary trust can assert that the property, the subject of the discretionary trust held by the trustee, is property to which he as the beneficiary is entitled and whether he can call it as his property.  Or, whether in reverse, a party to family law proceedings can deny ownership of the property.

Is it sufficient to say that if a person exercises control over the trust that this means he will be entitled to the asset, the property of the trust?

What does the court say?

The Full Court of the Family Court determined in 2018 in the case of Harris & Dewell that control of the trust is not sufficient to establish entitlement to the subject property.  So, if the husband is the trustee of the trust will this mean he controls the assets and owns the assets? On paper the husband may appear as trustee to be in control but is this sufficient?

The Court determined that what is required is control over a person or entity who, by reason of the powers contained in the trust deed can obtain, or effect the obtaining, of a beneficial interest in the property of the trust.

In that case the trust deed established that the father of the husband controlled the trust, he was the sole unit holder and he could obtain or effect the obtaining of a beneficial interest in the property of the trust.  On paper it appeared that the husband controlled the trust but the trust deed determined otherwise.  This meant that the property of the trust was not that of the husband but owned by a third party.

Recent Posts