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Acknowledgement of Debt, Relationship Property, Trustees, Trusts

Status of debts back

The relationship between trusts and relationship property agreements requires careful attention. Whether or not trustees can or should be party to a relationship property agreement is one of many important considerations.  Another consideration is how debts owing by trustees should be treated for relationship property purposes.

Importantly, if there is no relationship property agreement (and assets are disposed of to trust during a relationship) it is likely that any debts owing back by trustees will be relationship property.   Where there has been a disparity in proeprty taken into a relationship this can seem somewhat unfair, or may not reflect what one party (at least) had anticipated.

However, unless the parties are both independently advised, and a correctly documented and certified relationship property agreement concluded, any inequality of contribution may be disregarded.

Relationship property agreements can be confronting and the reality is, they represent an expense.  They are of course, in the alternative view point, an investment in future certainty – and for many parties provide the opportunity to properly reflect on their wishes and expectations.

 

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