Divorcing? Here’s What You Should Know About How it May Affect Your Trust
It can be difficult to predict how divorce will impact your trust as trusts vary in their structure, funding, and terms, so what may be true for one trust may not apply to another. To know how your trust will be affected, have an experienced lawyer thoroughly review it. Here are some areas they would look at to determine how divorce will affect your trust:
The Trust’s Structure
Trusts frequently name the spouse as a trustee and beneficiary. In divorce, clarify your wishes in regards to these provisions. Even if you want to keep each other in your financial plans going forward, the trust should be amended appropriately after your divorce is complete, so your intentions are clear.
Whether It’s Revocable or Irrevocable
If it’s revocable, changing the terms of the trust is easy but you may have to wait until after your divorce is final to do it due to “orders” that go into effect when you file for divorce that prevent you from moving assets. If your trust is irrevocable, it might be necessary to petition the court to change the trustees. The trust assets themselves may or may not be part of the divorce judgment.
Your State’s Laws on Community Property
Divorcing parties sometimes attempt to shield assets in trusts to keep them out of the pockets of the soon to be ex. When done surreptitiously, this could significantly complicate the divorce. Even when the assets in a trust are separate property, the income from the trust might still be considered for child support and alimony purposes.
With these different variables in play, you can see why meeting with us, your Personal Family Lawyer, for guidance in how to handle your trust moving forward is a crucial move. We can help you navigate your divorce so your assets, including those held in trusts, remain under your direction and control. Contact us today.
This article is a service of Levi Alexander, Personal Family Lawyer®. We don’t just draft documents, we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Family Wealth Planning Session™, during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this $750 session at no charge.
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