Can a living trust protect assets in a divorce?
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Can a living trust protect assets in a divorce?
Aside from being used as an estate planning tool, trusts can be used for asset protection in divorce. If a spouse established a trust prior to the marriage, the assets placed in that trust are typically considered separate property as long as the funds are not combined with marital funds at any point.
Is a trust a marital asset?
Generally, assets in a trust that is set up before marriage are exempt from being a marital asset\u2014as long as those funds don’t end up being commingled with the marital funds. In the case of divorce, \u201cthe nonfamily member will try to make that trust marital property,\u201d Taylor says.
What are the disadvantages of a trust?
The major disadvantages that are associated with trusts are their perceived irrevocability, the loss of control over assets that are put into trust and their costs. In fact trusts can be made revocable, but this generally has negative consequences in respect of tax, estate duty, asset protection and stamp duty.
