Can You Use A Trust To Protect Your Assets In A Florida Divorce?
Most divorce-related disputes are related to the distribution of assets. It is not uncommon for spouses to disagree on who gets what and how assets should be handled following a divorce.
But can you use a trust to protect your assets in a divorce and prevent your spouse from getting the assets held in the trust? There is no “yes” or “no” answer to that question because it depends on the type of trust and how you used the assets held in the trust, among other factors.
It is advisable to consult with an attorney to determine if you can use a trust to protect your property and assets in a Florida divorce.
What Are the Property Division Laws in Florida?
Florida operates under the laws of “equitable distribution” when it comes to dividing property in a divorce. While equitable does not mean equal (50/50), it means that Florida courts consider a variety of factors to ensure that the marital assets are split fairly.
When dividing assets, courts classify the couple’s assets as either marital or separate property. Any assets, including a trust, classified as marital property are subject to equitable division.
Are Trusts Divided Between the Spouses in a Divorce?
While a trust may be classified as marital property, it does not necessarily mean that the trust will be divided between the spouses.
It is not uncommon for courts to award a marital asset to one spouse when doing so helps balance out the property division process. For example, if a wife gets the marital home, the husband may be awarded the trust and the automobile.
Can a Trust Protect Your Assets in a Divorce?
That depends on the type of trust that you have. Whether or not a trust can protect your assets in divorce proceedings depends on:
- The type of trust;
- Whether the trust is classified as marital or separate property;
- Who made contributions to the trust during the marriage; and
- How the trust funds were used during the marriage.
Can a Revocable or Irrevocable Trust Protect Your Assets?
Any revocable trusts executed by either spouse during the marriage becomes null and void once the marriage ends. Any provisions regarding the Trustor’s former spouse are voided.
However, If the trust was funded with one spouse’s separate assets, that spouse would get those assets after a divorce. If the spouse used marital assets to fund the trust, it would be classified as marital property that is subject to division.
As for irrevocable trusts, Florida has no law that would void provisions regarding the Trustor’s ex-spouse following a divorce. Irrevocable trusts cannot be modified or revoked by the Trustor at any time or for any reason once executed. This can complicate matters when spouses file for divorce and large assets are held in an irrevocable trust.
If you are getting divorced and considering using a trust to protect your assets, consult with an Orlando property division attorney to find out how you can prevent your spouse from claiming a share of your property. Contact our lawyers at Greater Orlando Family Law to talk about your options. Call 407-377-6399.