Trusts can offer some protection against a claim but they are not bulletproof. Photo / 123RF

Q: I have a family trust that owns my family home and a couple of rental properties. I set up the trust after the breakdown of my first marriage to protect my assets for my children in case I got into another relationship. I met my current wife about 6 years ago and we had a child together. She stayed home to look after the children as I earned enough from my salary and the income from the rental properties to support us. We have since separated and she is threatening to take me to court as she believes she is entitled to a share of my home and rental properties. Can she do this?

A: Family trusts are incredibly common in New Zealand. Many people set up a family trust to try to protect assets for the benefit of themselves and their children. Trusts can offer some protection against a claim made by a future spouse but they are not bulletproof. There are several ways that a partner may be entitled to claim an interest in trust assets, whether they are a beneficiary of that trust or not.

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