Settling a trust together seems to be the obvious next step for so many couples. Once upon a time it was monogrammed towels. Now it’s seeing your name on a trust deed. But when the going gets tough the reality is, dividing linen is much easier than dealing with a trust. One of the reasons for this is the difficulty many couples face in recognising that the trust is not just an extension of themselves and trust property is not relationship property. This fact, and the consequences are neatly summarised in Broadbent v Broadbent where the court notes that:
“ It is clear that the Trust is not being administered properly. There are two reasons for this. The first is that the end of the parties’ marriage has brought the end of their engagement together as trustees. The Trust is not being administered, the welfare of the beneficiaries is not being given consideration. The second reason is that both Mr and Mrs Broadbent, I find, regard the Trust’s assets as being effectively relationship property. In their minds the assets of the Trust are to be divided between them and their contention relates to how that should be done.
 Mr and Mrs Broadbent are not the only beneficiaries of the Trust. Their daughters are also beneficiaries. Neither party mentions their interests at all. There is no evidence that their welfare is a matter which, as trustees, the parties are taking into account.”
To address this failure on the part of the trustees, the court ordered the removal of both of them and the appointment of an independent trustee.
As Mrs Broadbent had been the least badly behaved of the trustees, or the first to face up to the realities of the situation, the court ordered Mr Broadbent to meet her costs personally.
Trusts and relationships – sometimes just stick to linen. Easier to divide up. And perhaps for many, more enduring.
Broadbent v Broadbent  NZHC 254