Properties and Finances

Property divorce and trust issues can get rather complex and lead to a lot of guesswork on behalf of your lawyer. In many cases, trust funds are the Achilles’ heel of property divorce proceedings and are the one area that few attorneys seem to ever agree upon. Don’t assume that just because you have either benefited from or contributed to the trust that you are entitled to any of its contents.

The first and most important thing to determine is whose trust it is. This does not mean the recipient but the controller and whose name is on the trust. If your spouse has been granted a trust set up by a relative, and the relative still “owns” the trust and dishes out an “allowance” so to speak, then this would be a third party trust. A third party trust can not be shared in a property divorce settlement.

If you and your spouse have been putting money into a trust, under both of your names, then this is considered a joint trust and would be equally split. While it is not a guarantee, sometimes if you can prove that a portion of your income went into developing the finds in the trust that is solely under your spouse’s name, you might be able to claim it as a joint trust. This is rare and it often requires significant documentation that many people don’t consider important enough to keep.

If the trust under your spouse’s name has been funding the family income it is likely that you will see a monthly or biweekly alimony or child support check taken from the trust rather than splitting the contents of the trust. This becomes more difficult when a third party still owns the trust.

It is advisable to hire a financial advisor to help with your legal team if there is a trust involved in the property divorce settlement. Legal help and financial help can be necessary to weed through all the various possibilities and find the law that is applicable to your situation. Under some circumstances a trust issue during a property divorce settlement can be a straightforward issue, but more often than not this is one issue that can leave your lawyers with more headaches than a trial. Developing a strong legal and financial team is the only way to protect your current and your future interests.