Inheritance and family trusts in financial remedy

REVIEWED BY: Sean McNamara on 2026-08-29

Inherited wealth: the tension

English law has no rule that inheritance is ring-fenced. Courts weigh two instincts against each other:

Needs (White/Miller): if one spouse cannot house themselves, inheritance can be drawn on — needs trump origin, especially for children.
Contributions (Millar v Millar and later cases): where the couple's needs are met and the marriage was short, inherited wealth may be treated as the inheritor's own, kept largely outside the pot.

Practical upshot: the bigger the gap between needs and assets, the more likely inheritance is shared; the more comfortable the parties, the more likely it stays with the inheritor.

Trusts of the family home vs discretionary trusts

Trust of the family home (e.g. a house held by parents on trust for you): usually excluded. It was never truly "ours" — courts typically leave it alone and don't credit it to the beneficiary spouse's side either.
Discretionary trust (family trust holding cash/shares, trustees decide who benefits): the court asks whether you are a real beneficiary and whether trustees would, in fact, release money. If so, the trust is shown as a resource (s.25 Matrimonial Causes Act) and valued for the settlement — even though trustees legally hold it.

Nuptial settlements — variation of settlement orders

Both trusts of the family home and discretionary family trusts usually count as nuptial settlements — any settlement made in contemplation of, or during, the marriage (s.24(1)(c) MCA 1973). The court can vary the terms — e.g. redirect how money is paid to you or your children — or set it aside, without needing the trust to fail. This is often the practical tool against family trusts: vary, don't unravel.

Sheltering assets: what courts do

Courts are not impressed by schemes to put money out of reach. If an asset is parked with relatives or in trust, the court can:

treat it as your resource anyway ("realistically, the trustees will do as asked")
draw adverse inferences if records are thin (assets meant to be disclosed must be)
vary the nuptial settlement or use ancillary relief orders against third parties
in extreme cases (dissipating to defeat claims), treat it as conduct it would be inequitable to disregard — shifting the outcome and sometimes costs

Key cases to know

*White v White* / Miller v Miller — needs vs contributions framework
*Charman v Charman* — resources beyond your legal ownership
*Ben Hashem v Ali Shayif* — trust as a nuptial settlement
*Moher v Moher* — implicit expectations of trust benefit can count

Official links

Court process: https://www.gov.uk/money-property-when-relationship-ends
Matrimonial Causes Act 1973: https://www.legislation.gov.uk/ukpga/1973/18

This page is general information, not legal advice. YourFamilyCase.co.uk is an independent information directory and is not affiliated with HMCTS or any court.