Vancouver Discretionary Trust Valuation Lawyers 1-877-602-9900 handle complex high net worth family disputes.
Vancouver Discretionary Trust Valuation Lawyer, Lorne N. MacLean, Q.C prepared an important paper on “interests” in discretionary trusts which was presented by Mr. MacLean at the Family Law Advocates Group seminar on June 29, 2016. MacLean has written a number of papers on this topic over the last decade for family lawyers and for family law clients. MacLean Law is a multiple winner of Vancouver’s Best Family Law Firm by Top Choice Awards and we have 7 offices across Western Canada in Vancouver, Surrey, Richmond, Kelowna, Fort St John, Calgary and Winnipeg.
Hiring A Vancouver Discretionary Trust Valuation Lawyers Expert Just Makes Sense.
Vancouver Discretionary Trust Valuation Lawyers MacLean and Schon’s paper addressed the provisions of the FLA dealing with a spouse’s beneficial interest in discretionary trust property. These discretionary trusts are designed to benefit high net worth settlors and their beneficiaries. Vancouver Discretionary Trust Valuation Lawyers have been struggling with whether an “interest” in a discretionary trust is property for decades. A trio of new cases gives some guidance but also raises many questions.
Vancouver Discretionary Trust Valuation Lawyers – Free Paper
Get your free copy of this insightful paper from our skilled Vancouver Discretionary Trust Valuation Lawyers by contacting MacLean Law today! MacLean Law’s Wealth Protection and asset preservation family law department helps our English and Mandarin speaking high net worth clients and their spouses deal with issues related to high net worth asset valuation and division of family property. High net worth cases raise special concerns for our Vancouver and Calgary family law clients.
Vancouver Discretionary Trust Valuation Lawyers know that in these formative years of the FLA, the provisions dealing with trust property and beneficial interests have had minimal judicial consideration. While the raison d’être of the FLA is to promote early out of court resolutions through simplicity, clarity and predictability, the provisions of the Act pertaining to spousal interests in discretionary trusts are at odds with these lofty objectives. There are innumerable uncertainties regarding how the trust provisions of the FLA will manifest in practice! One thing is certain you need to hire the best Vancouver Discretionary Trust Valuation Lawyers to ensure you get a proper result in negotiation, mediation or at trial.
Documents Yes But Can Trustees Be Ordered To Act?
Vancouver Discretionary Trust Valuation Lawyers can obtain orders regarding document disclosure but can they restrain the trustees before trial from defeating a claim by the non beneficiary spouse or compel them to make a payout? Meet with us to discuss this issue.
Under BC’s Family Law Act we will no longer have to fight over whether a trust asset or interest “was ordinarily used for a family purpose” – which was the big question under our previous legislation the Family Relations Act. However, we must still value the starting excluded amount, value the content and calculate the gain to be divided. The FLA will undoubtedly present its own set of challenges.
Vancouver Discretionary Trust Valuation Lawyers Argue Against Trust Lawyers
Traditionally, trust lawyers have been fond of saying that beneficiaries of discretionary trusts do not have an actual interest in the trust; they only have hopeful expectation of benefiting. They say that beneficiaries of discretionary trusts have neither a proprietary legal or equitable interest in the trust property that any sane third party would pay a penny for.
Frustratingly for trust law lawyers, but fortunately for family law lawyers, under the FLA, the mere possibility of benefit under a discretionary trust is treated as a valuable certainty, even though the beneficiary spouse has no such certainty that he or she will receive any value from the trust. The FLA presumes that to the extent property held in a discretionary trust increases in value during the term of a spousal relationship, that increase belongs to the spouse-beneficiary, with certainty, for the purposes of the division.
A veritable legal war between trust law lawyers and family law lawyers is about to begin!
Trust lawyers confidently write numerous articles on how they will easily defeat a FLA claim. Family lawyers will need to be creative and aggressive to protect the non beneficiary spouse.
What remains unclear is how the beneficial interest will be converted into divisible property because it is it is the “beneficial interest” of the spouse which is family property – the underlying trust property itself may not be family property “… it is not clear how and in what form the interest of a discretionary beneficiary … can be transposed to a family interest … under the FLA.”: S.L.M.W. v. M.R.G.W. 2016 BCSC 272.
How Do We Value An Interest In a Discretionary Trust?
There is currently no certain approach to valuing an interest in a discretionary trust; however, courts have general taken one of three approaches:
- Evaluation of the likelihood of the beneficiary receiving under the trust by considering past benefit and/or the purpose of the trust.
- Dividing the interest by the number of beneficiaries at the date of valuation.
- Applying the “if and when” methodology that allows the non-beneficiary spouse with no interest to receive a portion of the beneficiary’s interest if and when it is distributed in the future.
The beneficiary’s ability to control or cajole distributions of capital and even income may also favour a higher value being placed on the interest.
Value To Owner The Solution?
The resolution of this legal holy war that pits trust law lawyers against family law lawyers seems to be that one must apply a “value to owner” approach, not a fair market value approach to valuing a spousal interest. Value to owner is an elastic concept that places focus on what a spouse would pay not to lose or be deprived of the benefits of his or her discretionary beneficial interest in the trust. However, the FLA says that courts are to look at fair market value, not value to owner. The resolution of this exciting tension between the dictates of the Family Law Act and the courts’ current approach remains to be seen!
Unfair Results Might Occur On Division
Other questions pertain to the kind of powers the court will apply to carry out the division of a spouse’s beneficial interest in property held in a discretionary trust. Will they be able to compel distribution where the trustees have unbridled discretionary powers to distribute the trust’s capital and income and/or alter the trust? Further, hardships can occur to both spouse’s when an equalization payment is ordered from other assets such that the beneficiary is stripped of all but their “trust” interest or where there are insufficient other assets to make the payment to the non-beneficiary spouse and they cannot compel payment.
While the future of the law pertaining to these provisions is unclear, what is clear is that have more questions than answers! Stay tuned with MacLean Law for the most recent updates on the Family Law Act discretionary trust issues!
If you have a discretionary trust valuation and division dispute you need to carefully assess the history of payouts and the trust deed and what the level of control a beneficiary can exert. Better yet hire a top rated lawyer who is completely familiar with this extremely complex area of law like Lorne N. MacLean, QC.
