Does 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.
What happens to a living trust in a divorce?
In a divorce, if assets in the trust are considered to be community property, they will usually be split equally between the parties. If certain trust property is considered separate property, this property will usually remain in the possession of the spouse who initially owned the asset.
Is a revocable trust marital property?
Courts treat assets in a revocable trust as if they are owned outright by the trust settlor. If the spouse created the revocable trust during the marriage with marital property, such as savings from employment, the assets are marital property and can be equitably divided as if owned outright.
Can a divorce financial settlement be reopened?
However, a financial settlement may be reopened if something later happens that alters the principle on which the original consent order was made i.e. where there has been a material change in circumstances. The new events must have occurred within a relatively short time after the consent order was made.
What counts as assets in divorce?
Non-matrimonial assets are financial assets acquired by you and/or your spouse either before you got married or after your divorce. Matrimonial assets typically include things such as the family home, pensions and savings.
How is debt split in a divorce?
The court will indicate which party is responsible for paying which bills while dividing property and money. Generally, the court tries to divide assets and debts equally; however, they can also be used to balance one another. For example, a spouse who receives more property might also be assigned more debt.