The Complexities of Trust Funds in High Net Worth Divorces
Going through a divorce forces you to face difficult financial, mental, and emotional challenges. When trust funds come into play, things can get even more complicated. Trust funds are meant to manage and protect assets, but they can also make dividing property during a divorce harder.
If you or your spouse have a trust fund, it’s important to know how it may be handled in your divorce. Call Pence Law Firm at 304-345-7250 to discuss your concerns with our divorce lawyers.
The Impact of Trust Funds on Divorce Agreements
Trust funds can significantly affect how assets are split during a divorce. These funds are often set up to save wealth for future generations or to keep assets safe from creditors. However, the protections built into trust funds can make dividing them difficult when a marriage ends. The way a trust fund is structured plays a big role in this process. Some trusts have specific terms that only allow the original beneficiaries to receive assets.
Understanding these terms is key to knowing how a trust fund might impact your divorce agreement. For example, certain trusts might have clauses that make it almost impossible to access the assets within them. This can create major obstacles for both parties.
Various Types of Trust Funds
There are different kinds of trusts, and knowing which one you’re dealing with is crucial in a divorce. The two main types you’ll come across in a divorce are revocable and irrevocable trusts. A revocable trust can be changed or canceled by the person who created it at any time. This means it might be easier to deal with during a divorce since adjustments can be made.
On the other hand, an irrevocable trust is much more rigid. Once it’s set up, its terms usually can’t be changed, making it tough to access the assets inside. This can be a major sticking point in a divorce because those assets are often out of reach for both spouses.
Safeguarding Your Interests
To protect your interests during a divorce, start by understanding the terms of the trust and how they affect asset division. This may require looking over trust documents and getting help from a lawyer who understands these details. Make sure you gather all the paperwork that shows where the trust assets came from and what they were meant for. Another important factor that may come into play is when the trust was established; trusts created during a marriage may more easily be considered marital property.
It’s also a good idea to keep track of any communications or documents related to the trust. This can include emails, letters, or notes from meetings with trustees or financial advisors. Having this information handy can help clarify any misunderstandings and support your case.
You might also want to consult with a financial advisor. They can help you understand the value of the trust assets and how they fit into your overall financial picture. Knowing this can make it easier to plan for your future and make informed decisions.
Financial Outcomes & Trust Funds
Even if one spouse is not owed part of a trust in a divorce, the trust itself may affect the decisions made during the divorce. Consider a divorce in which one spouse has a sizable trust fund that they received prior to the marriage. Even if the courts determine that the other spouse is not entitled to part of that trust, the trust may influence how much is paid in child support and alimony. The spouse without a trust fund may be entitled to significant child support and spousal support, particularly if they gave up their career or otherwise made non-financial sacrifices for the sake of the marriage. Since the trust fund impacts the standard of living enjoyed by both spouses, it can influence or fully determine how much financial support the lower-earning spouse receives after divorce.
Get the Support You Need with Pence Law Firm
Make sure your best interests are protected with the team at Pence Law Firm. Schedule your consultation now by filling out our online contact form or calling us at 304-345-7250. Our experienced team of high-net-worth divorce attorneys can help you work through the nuances of your divorce.
