Abstract:
Discretionary trusts present significant challenges for the division of matrimonial assets during divorce. On the one hand, dividing a discretionary trust potentially conflicts with traditional trust law principles and also affects non‑spouse third parties. On the other hand, not dividing a discretionary trust undermines the policy of family law to fairly divide the fruits of the marriage between divorcing spouses. This article suggests six ways in which the Singapore courts can take a discretionary trust into account during division, namely, by: (a) treating the discretionary trust interest as an “asset” under s 112(1) of the Women’s Charter 1961 (“WC”), complemented by a holistic valuation of that interest; (b) ordering the division of the trust assets “if as and when” the respondent-spouse receives a trust distribution; (c) setting aside dispositions of property into the trust using s 139M of the WC; (d) challenging the trust as a sham; (e) challenging the trust as an illusory trust; and (f) regarding the trust as a financial resource.