Family Trusts in Divorce: What You Need to Know Before You Sign

You will, at some stage through your divorce, start to think your role now is to just sign paper after paper after paper.

When you’re going through a divorce, paperwork can feel endless.

Among the most confusing documents are those relating to a family trust. For many people—especially the partner who hasn’t been handling the finances—being asked to “just sign this” can feel intimidating, or worse, suspicious.

Why Trusts Exist

Family trusts are common tools used for two main reasons:

• Asset protection: separating business or risky assets from personal ones, so if something goes wrong, your home and savings aren’t necessarily dragged down with it.

• Tax minimisation: allowing income to be distributed to family members with lower tax rates, reducing the overall tax burden.

  
  

On paper, this can make sense. In practice, though, these trusts are often established by one party - the financial driver of the relationship - which can leave one partner signing off on documents they don’t understand; sometimes for years.

The Hidden Risks

Signing trust documents isn’t just a formality.

As a trustee or signatory, you carry legal responsibilities—even if you don’t fully understand them. That means if something is wrong, it could fall back on you.

It’s also common for people to notice income on their tax return that never actually appeared in their bank account.

While this is often a legitimate “paper transaction,” the lack of transparency can create suspicion, especially during a separation where trust is already low.

Independent financial advice can really help with this - this area is ripe for misunderstanding and suspicion and bad explanations (don't automatically assume your ex has a crystal clear understanding of the trust structure...). Good advice can help keep the temperature down, which is good for all involved.

What to Do if You’re Unsure

If you’ve been asked to sign something relating to a family trust and don’t fully understand it, don’t just go along with it.

Instead:

1. Book a meeting with the accountant – They work for both of you, not just your ex.

2. Ask questions – Find out what you’re signing, why it matters, and what responsibilities come with it.

3. Seek support – Having a financial adviser or lawyer join you can help translate the jargon.

Taking Back Control

You don’t need to be an expert in trust law, but you do need to understand the basics of what’s happening with your money.

Asking questions isn’t silly—it’s brave. The more informed you are, the better you can protect yourself and make confident decisions in what is already a challenging time.

If this episode resonated with you or could help someone you know, please share the Weaving Gold podcast.

Follow us on Instagram, Facebook, LinkedIn, and TikTok, or visit weavinggoldpodcast.com to explore more episodes or get in touch.