Does an Interest in a Family Trust Need to Be Valued in a Property Settlement?

Family trusts can make property settlements complicated.

One of the questions that can arise is what happens when one spouse is a beneficiary of a family trust, particularly where the trust is controlled by their parents or other family members.

Does their interest in the trust have a value?

And if it does, do you need an expert to put a dollar figure on it?

A recent decision of the Federal Circuit and Family Court of Australia considered exactly that issue.

In Quinones & Quinones (No 3) [2026] FedCFamC1F 562, the husband was a beneficiary of a discretionary family trust established by his parents. His parents controlled the trust.

The wife argued that the trust was, at the very least, a substantial financial resource available to the husband. She wanted an expert appointed to value his interest in it.

That raised an interesting question.

If the husband's interest wasn't worth nothing, did someone need to work out exactly what it was worth?

The husband did not have the power to simply direct the trustee to make a distribution to him.

But as a beneficiary, he did have certain rights in relation to the proper administration of the trust.

Importantly, the Court did not accept that those rights necessarily had “no value whatsoever”.  

But that didn't automatically mean they needed to be valued.

Further, no expert had been identified who could reliably value the husband's interest. There was also no established methodology put before the Court showing how such a valuation could properly be undertaken.

The husband had no present entitlement to the income or capital of the trust.

His parents controlled it.

There was also insufficient evidence to establish that the husband had any practical influence over how the trust operated.

Any valuation would therefore have depended heavily on assumptions.

The Court refused the wife's application to appoint an expert to undertake the valuation.

Notably, the Court said that if the Husband's interest was ultimately found to be a financial resource to him, putting a precise dollar value on the husband's interest wasn't necessarily the important question. Rather, the Court should consider the nature, extent and likely benefit of the financial resource to the husband.

Put more simply, what benefit could the husband actually get from the trust?

That is a much more practical question than trying to force something into a dollar figure where there is no reliable way of calculating one.

What does this mean if there is a family trust in your property settlement?

So what does this mean if there is a family trust in your property settlement?

It does not mean that every interest in a family trust will be treated the same way.

Nor does being named as a beneficiary automatically mean that the assets of the trust are your property for inclusion in the property pool for division.

How a trust is treated can depend on matters including who controls it, the terms of the trust deed, the person's rights under the trust, history of distributions and the practical benefit the trust has provided or may provide.

Sometimes the question will be whether the trust itself, or its assets, should be treated as property.

In other cases, the trust may potentially be relevant as a financial resource only. And, as Quinones demonstrates, even where an interest has some value, that does not necessarily mean an expert needs to put a precise dollar figure on it.

If you are separating and a family trust forms part of your financial circumstances, Samaras Lawyers can advise you about how the trust may be considered as part of your property settlement.

Samaras Lawyers | Family Lawyers in Hurstville, Sydney