Untangling your assets in the divorce process can be quite complicated. If you also have trusts, the way you proceed with dealing with them will depend on the type of trust you have.
Here’s an overview of what you should know.
Revocable living trusts
If you and your spouse developed a living trust before your divorce, this trust will likely be dissolved during the divorce process. Either you and your spouse or a judge (depending on how your divorce proceeds) must decide what will happen to the property placed in the trust.
Living trust assets will be divided similarly to the other assets in the divorce. You’ll need to know whether those assets are marital or separate property. Marital property will be added to the list of assets to be divided, while separate property will return to the control of the rightful owner.
Irrevocable trusts
If you or your spouse have assets in an irrevocable trust and placed them there during the marriage, those assets are no longer technically considered marital assets, even if they were marital assets before being placed in the trust. Irrevocable trusts take legal ownership of those assets out of your hands. You cannot revoke or change the trust. The property in the trust will remain in the trust until your death, at which point it will be transferred to the beneficiary you named.
The only exception is if one spouse created an irrevocable trust using marital assets without the consent of the other spouse, in which case a judge could require that spouse to reimburse the other.
For more information about dealing with trusts after a divorce, contact an experienced divorce lawyer in Minneapolis at Appelhof, Pfeifer & Hart, P.A.
