Can a trust be claimed during a divorce?

Trust assets are not subject to probate, increased tax liability, and in this case, claims from an ex-spouse during divorce proceedings. Your ex-spouse was once in a marriage with you, not the trust. A claim against the property in your trust is like an ex-spouse claiming half of your neighbor’s real estate during your divorce.

Is it legal to put property in a trust?

While there are several types of trusts, they all generally fall under two main umbrellas for putting property in a trust: A trust is a legal document outlining how you’d like putting property in a trust and other assets distributed after you die.

How are marital assets protected in a divorce?

The key to protecting marital assets in a divorce is to create an irrevocable trust. Assets that are not owned or controlled by a spouse cannot be subject to division in a divorce. Distributions from a trust of which you are a beneficiary can be protected if the proper language is used. This portion of the site is for informational purposes only.

How are discretionary trusts handled in a divorce?

The position in respect of discretionary trusts is more complex. If a spouse is within the class of beneficiaries in the discretionary trust, then, before the court can treat that interest as a financial resource, it must find that the trustees would be likely to advance trust assets to the spouse either immediately or in the foreseeable future.

How does a trust work in a divorce?

The type of trust and its provisions impact how a trust is treated in a divorce. The type of property and when it is placed in the trust also impacts how assets will be distributed. Premarital property refers to assets owned by a spouse before the marriage.

Can a trust be declared invalid in a divorce?

The settlor spouse must, however, be aware that the other spouse may argue that the settlor spouse has wrongly dissipated assets. If the court agrees, it may declare the settlor’s disposition of funds into a trust as invalid, resulting in the assets placed in the trust reverting back to the spouse.

Can a spouse claim property in a trust?

A claim against the property in your trust is like an ex-spouse claiming half of your neighbor’s real estate during your divorce. Although a trust is under the name of a trustee, which can be you, depending on the type and whether it is made revocable or irrevocable, the trust is always established for the benefit of named beneficiaries.