He was a 72 year old father . He had spent 40 years building a commercial property portfolio worth £5 million. He was now watching it get dismantled in his son’s divorce settlement.
His son had inherited the business five years earlier. The properties generated a good income, which he and his wife lived on. They started a family. When the marriage failed, her lawyers argued the portfolio was a resource of the marriage. The court agreed. The asset, intended to support generations, was reclassified as part of the matrimonial pot. The family lost control.
A Structural Failure
This was not a personal failure. It was a structural one. The father had passed the assets to his son directly. There was no legal separation between his son and the inheritance. Recent legal analyses of high-net-worth divorces confirm this is a common weak point. Once an inheritance is mingled with marital finances, or used to support a family's lifestyle, it becomes very difficult to shield.
The starting point for a court is to divide matrimonial assets. But it also has a duty to meet the future needs of both parties and their children. A £5 million portfolio, even if inherited, will almost certainly be used by a court to meet those needs if other assets are insufficient.
The Air Gap
There is a straightforward way to protect against this. The assets should never have been in the son’s personal name. By placing the portfolio into a Discretionary Trust, the family retains control. The assets are legally owned by the trust, not the individual. The son can be a beneficiary, receiving income as decided by the trustees, but he does not own the capital.
This creates a vital air gap between the beneficiary and the wealth. A court cannot give away an asset that a person does not own. The trust protects the capital for future generations, exactly as the grandfather intended. It ensures the business survives a divorce.
This kind of planning is not about mistrust. It is about foresight. If you are thinking about how to pass on what you have built, we can talk through the options. The first conversation is always the hardest.
Share this article
Written by Sean Kiani, Estate Planner at Inheritance Made Simple. Sean writes and reviews the firm's guidance on estate planning, wills, trusts and inheritance tax, and works with families across Bournemouth, Poole, Dorset and Central London. Verify Sean's Society of Will Writers membership listing.