The best tool you have available to protect your assets in the event of a divorce is a prenuptial agreement. In such an agreement you can lay out all the stipulations for what will happen to your assets should you and your spouse end up getting divorced.
But what if you have trusts? Can you protect trust assets from the asset division processes that occur in a divorce?
Here’s an overview of what you should know.
How trust assets are handled in divorce
In most cases, assets that are placed in a trust that was established before marriage will be treated as separate property in a divorce.
Single people do not need the approval of anyone else to set up a trust. This makes them a great option for both estate planning and for asset protection. If you use a revocable living trust, assets placed into the trust are considered property of that trust, but you still have the ability to manage them at your discretion.
If you are married, however, any marital assets placed in a trust will still be considered marital assets that are subject to distribution.
If you’ve recently been divorced, you can use a trust (among other techniques) to protect your post-divorce assets from creditors or from lawsuits. In this way, trusts can continue to protect assets even after the divorce has been finalized.
Looking to learn more about the various methods of asset protection and how they can help you in the divorce process? Contact an experienced divorce lawyer at Applehof, Pfeifer & Hart, P.A.
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