Sham Trusts and the 1975 Act: How the High Court Will Unpick Asset Protection Schemes

The High Court’s decision in Teixeira v Moaven [2026] EWHC 1215 (Ch) is a major warning to anyone attempting to use trusts to reduce the value of an estate before a claim under the Inheritance (Provision for Family and Dependants) Act 1975 (“IPFDA”).

At the centre of the case were four London properties owned by Abbas Moaven. Shortly before his death from cancer, he signed declarations of trust stating that the properties had always been held equally for himself, his brother and his mother. If valid, two-thirds of the value of those assets would have fallen outside his estate, significantly reducing the resources available to his widow and children under the Inheritance Act 1975.

The court found the trusts were “shams”.

What is a sham trust?

A sham trust is not simply a poorly drafted or ineffective trust. It is a trust document that gives the appearance of creating legal rights which the parties never genuinely intended to create. The purpose is usually to mislead third parties about the true ownership of assets.

In Teixeira, the court relied on the classic definition from Snook v London and West Riding Investments Ltd: a sham exists where documents are intended to create the appearance of rights and obligations that are different from the true position.

The judge concluded the declarations of trust were “pieces of paper designed to disguise the true facts” and were created to make the estate appear much smaller than it really was.

What will the court look at?

The judgment is important because it shows exactly how the court approaches allegations of sham trusts in probate disputes.

The court will look beyond the wording of the trust document and examine the surrounding evidence in detail, including:

• who actually paid for the assets

• who controlled and managed the properties

• how rental income and mortgages were handled

• historic tax returns and financial records

• attendance notes from solicitors and accountant

• whether the alleged trust arrangement was ever mentioned before litigation arose

• whether different and inconsistent trust structures were proposed at different times

• whether the parties behaved as though the trust genuinely existed

In Teixeira, the court found there was no credible evidence of any long-standing family arrangement. The deceased had always treated the properties as his own.

Critically, the evidence showed multiple alternative trust arrangements were drafted shortly before death, with advisers effectively discussing which structure would best protect assets from the widow’s claims. That proved fatal.

Why does this matter for IPFDA claims?

The implications for 1975 Act claims are significant.

Where a trust is found to be a sham, the assets remain part of the deceased’s estate and are fully available to satisfy claims for reasonable financial provision. In practical terms, sham trust findings can dramatically increase the size of the estate available to spouses, cohabitants and children bringing claims under the IPFDA.

The case also confirms the court’s willingness to investigate transactions entered into shortly before death where there is evidence they were designed to reduce or defeat potential claims.

For contentious probate practitioners, Teixeira demonstrates that the court will carefully scrutinise retrospective trust arrangements created in the shadow of illness, death or family dispute. Labels and documents alone will not determine ownership. The court will focus on the reality of the arrangement and the true intention behind it.

How Forbes Solicitors Can Help

Our specialist Contentious Probate team advises clients on a wide range of inheritance disputes, including claims under the Inheritance Act 1975, adult child claims, and cases involving disabled dependants or vulnerable beneficiaries.

If you believe you have been unfairly excluded from a Will, we can help you assess your options and the strength of any potential claim. For more information or to arrange a consultation call 0800 689 3607 to speak with a member of our team.