May 6, 2021
Divorce can be hard. The separation of two intricately connected lives can be messy and painful. This is especially true for your finances. Not only is there the cost of the divorce; there’s also the split of your assets.
Your financial stability may be affected by your divorce, both now and for the foreseeable future. If you have a trust, you may be wondering whether that will protect your assets from your divorce. The answer is a little complicated.
State Divorce Laws and Trusts
Depending on your state, trusts may or may not be able to help you. For example, Florida doesn’t necessarily split between two spouses 50/50. The courts will instead do what they think is fair to both spouses. Should your trust fund be classified as marital property, it will be part of your financial split.
However, the fund itself won’t necessarily be split in half. Occasionally, a trust fund will be awarded to just one spouse. This is usually done to balance out property awarded to another spouse. For example, if one spouse gets awarded the family car and other property, the other spouse may be awarded the trust fund to keep things balanced.
Trusts and Divorce
Simply put, to find out what happens to your trust, you have to know what kind of trust it is. There are also other factors like when the trust was created, which spouse contributed the funds, and how the funds within the trust fund were used. These factors can change how the trust is dealt with during a divorce.
The two most common types of trust are irrevocable trust and revocable trust.
Revocable Trust
In short, a revocable trust is one that can be amended or canceled. Instead of wills, people usually use revocable trusts as you can use them to mitigate or even avoid altogether the lengthy probate process.
If one spouse (the settlor of the trust) should decide to execute a revocable trust fund, it becomes null and void when the marriage dissolves. What this means is that should there be any provisions in the trust that affect or are directly for the settlor’s former spouse, these are voided.
Furthermore, the law (in Florida) treats the settlor’s spouse as if they died on the date of the annulment or entry of the judgment for dissolution of marriage or divorce. So as long as you only used separate funds to fund the trust, the settlor retains control of the trust fund. These cannot be transferred to your former spouse.
If you have used marital funds, then the fund will be considered marital property. This may cause the courts to order that the trust be dissolved, and the funds be divided.
Irrevocable Trusts
If you’re in Florida, then an irrevocable trust cannot be considered marital property. This is true even if you made your spouse the beneficiary. Unlike revocable trusts, there isn’t any law that voids provisions for a former spouse. This means that they will continue to benefit from it even after a divorce.
Conclusion
Divorce is truly a difficult thing and a trying part of life. Make it easier by hiring an experienced attorney. They will be able to truly help you manage your trust fund or any other financial holding as you navigate your divorce.
Are you in need of a trustworthy divorce attorney? Contact Dorsey Law JAX today! We represent clients for divorce, family law, criminal defense, and more.
