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How to Handle Trusts in Your Divorce


Dividing property in divorce is one of the most challenging aspects of the process. The more diverse the types of assets a couple owns, the harder it is to figure out how to fairly divide and value the property. One type of asset that can be particularly tricky to address are trusts. Many couples will create trusts during the course of a marriage as part of their overall estate plan. Generally, any property acquired or accumulated during the time of the marriage is considered marital property and subject to division in divorce. Trusts, however, can create significant challenges to this endeavor. For many couples, the assets contained in the trust are the most valuable property they own. The problem trusts create is the fact that legally the property is no longer owned by the spouses, and thus, outside the matters typically handled in divorce. Given this situation, what options do divorcing couples have to address the division of trusts in divorce?

Does the Court Have Authority to Touch Trust Property?

In any legal proceeding, the court can only directly order a person to do something if they are a party to the case. With trusts, if the person with an interest in the trust, such as a child or other family member, is not a party to the case, which they would not be in divorce, the court has no power to touch trust assets without the consent of all beneficiaries. This is the situation with irrevocable trusts, and the court essentially has no power to touch assets outside the marital estate for purposes of equitable distribution. Revocable or living trusts do not necessarily receive the same treatment if the settlor and beneficiary are one or both of the spouses. In this case, when all of the relevant parties are before the court, and the judge has authority to make a decision about trust assets. The question would become whether the trust contains marital assets, which depends upon when the assets were added to the trust and if they are used for the benefit of the marriage, or whether an asset could be considered separate property.

Rules for Dividing Trusts

In addition to situations in which both spouses are connected to a trust, trusts held by just one spouse can also play a role in divorce. As mentioned above, revocable trusts are not generally excluded from consideration in the marital estate, and can be reached for property division, child support, and alimony. Importantly, even irrevocable trusts can be reached to pay for child support and alimony, so they can still be relevant to a divorce for this purpose. Further, courts will not allow a spouse to create a trust in anticipation of divorce simply to keep assets from the other spouse. In this instance, the court would have authority to take action and order the division of trust assets. This is a very complex area of law, and an experienced divorce attorney should be consulted about how to address the existence of trusts in the resolution of a divorce.

Speak to a Florida Divorce Attorney

If you have questions about how the law would divide your assets in divorce, talk to a divorce attorney today. The Orlando property division attorneys at the Donna Hung Law Group know the complexities property division can introduce to these cases, and are here to help you get a fair settlement. Contact us at (407) 999-0099 for a consultation.