A husband regularly transferred most of his income to trusts, in which he acted as the protector. The trusts were formally administered by independent trustees but were actually controlled by the husband through letters of wishes enforced by the abuse of his powers as the protector of such trusts.
The Court held that the trusts’ RES should be part of the balanced property at the divorce due to the husband's absolute control over the trusts and the trusts’ RES. The balance of resources arrangement stipulated in Israeli law grants each party half of the property accumulated during the marriage. When there is an absolute and single identity between a sole shareholder and a company, then the company and the shareholder should be deemed as one for purposes of assets balance at a divorce, even without piercing of the corporate veil. Here, the husband formed various trusts through a third party, transferred to them most of the assets accumulated during the marriage, creating a false representation of separation between him and the assets, while in practice he retained complete control by means of letters of wishes to the trustees, the execution of which was enforced by replacing the trustees by virtue of his authority as the protector of the trusts. Hence, there is an absolute similarity between the husband and the companies held by the trusts and their assets should be balanced even without piercing the corporate veil and the husband should not be allowed to prevent his wife from her share by means of the misrepresentation he created.