Trusts and Divorce – Are My Assets Protected?
- Posted in: Asset Protection
As this recent article in Forbes points out, trusts are quickly gaining ground as a popular estate-planning tool. They are attractive to many because they can be molded to serve a variety of purposes. One such purpose may be shielding assets in the event of divorce.
Prior to a marriage, any assets placed in a trust are typically treated as separate property. This means that before marriage, both partners should carefully consider the extent of their assets and whether they want to protect those assets from the possibility of divorce. Setting up a trust is a good way to protect such assets because they are simple to establish and do not require the consent of your partner like a prenuptial agreement would.
Single business owners should consider setting up a Domestic or Foreign Asset Protection Trust. Such a trust would be able to hold the ownership of your company. Then, should you get married then divorced, your former spouse wouldn’t take any ownership in your company because legally it is owned by the trust.
It also may be a good idea to set up a trust after you get divorced. A well-constructed trust may allow you to protect your post-divorce assets from the lawsuits and creditors of your former spouse. Many do not realize that, after you are divorced, you may still be financially vulnerable based on the actions of your spouse.