Child's fight over $2m in trust fund

11-year-old girl takes civil action against her father. Photo / Paul Estcourt

An 11-year-old girl has been caught up in a High Court battle between her estranged parents over access to a $2 million trust fund.

The child was named in court documents as taking civil action against her father because he was refusing to pay her as a trustee of a family trust.

No one can be identified because of court rules, but the girl's parents split last year and she moved out of the family home to live with her mother.

The child's mother said her battle had convinced her trusts were set up by wealthy men to contravene their child support obligations.

"It's a question of a child being evicted from her home and her father refusing to pay. It has cost me a fortune, $80,000, to get what she's entitled to," she said.

She said her ex-husband lived in a seven-bedroom Auckland home, worth $1.3m, which belonged to the trust. He also had a $400,000 beach home and a $500,000 investment fund.

"It's a miserable situation. It really boils down to a father never acknowledging any financial responsibility to his children," she said.

She had explained to her daughter that her parents were in court to resolve some issues and the child did not seem to be affected by the split.

"She hasn't seen her father recently but she is very bright and is concentrating on her school," she said.

The case was settled in a judicial settlement conference in the Auckland High Court last month which the parties agreed to. No details can be revealed.

The father blamed his ex-wife for using their daughter for financial gain.

"Her mother wants money. It finally got settled after a pretty gruelling 11 hours," he said.

Trust litigation and relationship property lawyer Deborah Hollings QC said such cases were "incredibly common".

She said the Child Support Act had provisions for children to access trust funds.

"Initially when you first apply for child support it is assessed on taxable income which excludes trusts but parents can ask the IRD to look at it more closely to include all financial resources including property and trusts," she said.

The legal profession was divided about trusts.

"One group sees it as a perfectly acceptable legal vehicle which has been around for 500 years and enables the division of ownership. But another group would see the trust's structure fundamentally designed by individuals to avoid obligations everybody else has who don't have trusts," said Hollings.