Insight
September 15, 2026
A recurring difficulty in divorce proceedings arises when substantial family wealth is held in a trust rather than in either spouse's personal name. The family home, investments, business interests or other valuable assets may all sit within the trust structure, even though one spouse has effectively controlled those assets and enjoyed their benefit throughout the marriage.
For the other spouse, the concern is understandable. If the assets do not technically belong to their husband or wife, can they simply fall outside the financial consequences of the divorce?
South African law does not permit trust assets to be treated automatically as the personal property of a spouse. A properly constituted trust has its own legal consequences, and trust property does not belong to a trustee personally. There are, however, circumstances in which a court can look beyond the formal structure of a trust where it has been used in a manner that prejudices the other spouse.
The trust as the starting point
The existence of a trust cannot be disregarded simply because one spouse established it, serves as a trustee or is also a beneficiary.
Section 12 of the Trust Property Control Act 57 of 1988 expressly provides that trust property does not form part of the personal estate of a trustee, except to the extent that the trustee is entitled to that property as a beneficiary. This separation between trust property and the personal estates of the trustees is fundamental to South African trust law. A challenge arises where the way in which the trust operates bears little resemblance to that legal separation.
A spouse may formally be one of several trustees while, in practice, making all significant decisions alone. Personal expenses may be paid from trust accounts, trust property may be treated as though it belongs to that spouse, other trustees may exercise little independent judgment, or personal assets may have been transferred into the trust as the marriage deteriorated. The courts then look beyond the trust deed to examine how the trust has actually been administered.
Does control alone determine the issue?
One of the leading cases in this area is Badenhorst v Badenhorst, in which the Supreme Court of Appeal considered whether the assets of a discretionary trust should be taken into account when determining a redistribution claim following divorce.
The Court held that the enquiry required evidence that the spouse exercised de facto control over the trust and that, but for the trust, the spouse would have acquired and owned the relevant assets personally. In assessing that control, the court considered both the terms of the trust deed and the way in which the trust's affairs had been conducted during the marriage.
The decision remains important, but subsequent judgments have developed the premise considerably. The enquiry does not end simply because one spouse exercises extensive control over a trust.
In REM v VM, the Supreme Court of Appeal emphasised that looking behind a valid trust structure requires more than showing that a spouse administered the trust informally or exercised considerable influence over it. The trust form must have been abused through fraud, dishonesty or an improper purpose in a manner that prejudiced the other spouse's financial claim.
This is significant. A family trust can legitimately be closely connected to one spouse without its assets becoming that spouse's personal assets for purposes of divorce.
Trusts used to defeat an accrual claim
This was further clarified by the Supreme Court of Appeal in PAF v SCF. The Court confirmed that, where the trust form has been abused to prejudice a spouse's accrual claim, a court has a common law power to look behind the trust structure. This power exists independently of the Matrimonial Property Act and the Divorce Act. Where the necessary abuse is established, the value of trust assets can in appropriate circumstances be taken into account when calculating the accrual of the spouse who exercised control over the trust.
This does not mean that the trust ceases to exist or that every asset held by it is simply transferred into the matrimonial estate. Instead, the court is responding to the way in which the trust structure has been used. The focus is on preventing the trust from becoming a mechanism through which one spouse can avoid an obligation that would otherwise arise from the matrimonial property regime.
The courts have continued to apply these principles. In NJ v ACJ and Others, decided as recently as April 2026, the KwaZulu-Natal High Court again considered allegations that trust structures had been used in the context of an accrual dispute. The judgment reiterated the distinction between recognising a valid trust and nevertheless looking behind its structure where the separation between trust property and personal control has been abused.
Evidence tells the story
For a spouse who suspects that a trust has been used to place assets beyond reach, the practical challenge is evidence.
The trust deed provides the legal framework, but it is seldom the complete picture. Financial records, trustee resolutions, bank statements, distributions, loan accounts, asset transfers and correspondence can reveal how the trust actually operated during the marriage.
The timing of transactions can also be important. An asset transferred to a trust many years earlier as part of an established estate planning arrangement presents a different factual picture from assets moved after the marriage had begun to deteriorate or once divorce proceedings were contemplated.
The conduct of the trustees is equally relevant. Trustees are expected to exercise their powers independently and in accordance with their fiduciary duties. A pattern in which other trustees simply approve the decisions of one dominant spouse can form part of the factual enquiry into control and abuse.
Similarly, the distinction between trust expenditure and personal expenditure can become important. Regular use of trust funds for personal living expenses, private purchases or obligations unrelated to the proper purposes of the trust may warrant closer examination.
None of these factors necessarily determines the outcome on its own. Taken together, however, they can establish how the trust functioned in practice.
Investigation is paramount
Trust disputes in divorce proceedings can become complex because they sit at the intersection of matrimonial property law, trust law and litigation procedure.
A spouse who believes assets are being concealed should therefore avoid assuming either that trust property is automatically beyond reach or that describing a trust as an “alter ego” will be sufficient to bring its assets into account.
The precise matrimonial property regime is important, as is the relief being sought and the evidence available to support it. The trustees and the trust itself may also need to participate in proceedings where the relief sought could affect trust property or its administration.
For trustees and spouses who legitimately use family trusts for succession, asset management or estate planning purposes, the cases carry an equally important message. Proper trust administration, independent trustee decision making and a clear separation between personal and trust affairs remain important safeguards when the trust is later subjected to scrutiny.
Where significant assets are held through a trust and divorce proceedings are contemplated or underway, early legal advice can help establish the true financial position, identify the documents required and determine whether there is a proper basis for looking beyond the trust structure.
Barnard's Family Law and Litigation teams advise spouses, trustees and families on trust assets arising in divorce proceedings, accrual and matrimonial property claims, disclosure and investigation of assets, and disputes concerning the control and administration of trusts.
