A recent decision from the UK High Court involving trusts set up by a Russian Oligarch, Mr Pugachev who fell out with Mr Putin, is raising alarm bells with Trust law practitioners.
Given our own Supreme Court’s decision in what has become known as the Clayton Case it is clear that governments and our courts are moving to try to extract assets from trusts. It is clear that if there is any level of control by any one who has settled assets on a trust whether they are the original settlors named in the trust deed or someone else there is a risk that the assets could be extracted from the trust. This case underlines the importance of proper trust management. We will be discussing the implications of this decision with clients when undertaking our regular reviews as part of our trust management service to consider whether or not to diversify the powers of control (mainly the power to hire and fire trustees and beneficiaries) so that judges cannot be persuaded by a “predator” that the assets in the Trust should be subject to a “snatch and grab” raid.