When a couple is settling a divorce in a court of law, the attention is majorly on property division while maintain a stable income source for both parties. Asset distribution and disposal of estates is inevitable when dissolving a marriage, and the change in status should reflect on your documents too. Estate planning often results in cancellation of joint accounts and credit accounts. However, it is critical to pay detailed attention to estate planning elements such as trusts. Some of the things to remember when reviewing your trusts with a trust attorney in Utah include the official designations, minor heirs, and any legal considerations that are specific to your state.
Family Trusts
In a divorce case, family trusts raise certain issues that require attention from both parties. The laws that govern disposition of family trusts are dynamic, hence the need for legal advice.
Future Inheritances
The assets that a couple acquires after divorce do not count as marital assets. Therefore, when the judge is making a ruling on divorce settlements, there is no provision for future inheritances. Future inheritances only affect the financial position of the divorcees. You may find that the attorney of one spouse may request to see the estate plan of the other’s parent. Some parents make provisions for their grandchildren in their estate plans, and an individual can consider to hide these details during the divorce process.
Spendthrift Provisions
These refer to asset protections for the trust beneficiaries. These provisions specifically protect the beneficiaries’ assets from creditors. In some states, the law allows children and spouses to make claims on trust assets even after divorce. Judges also use spendthrift provisions to compensate a spouse who is harassed in terms of making child support payments, or paying late alimony. In the end, the court aims at equalizing financial assets.
Inherited and Gifted Assets
Both inherited and gifted assets raise issues in divorce cases. It is common belief that any item one received as a gift from a family member or friend while married qualifies to be separate property as opposed to marital property. The truth is any asset; whether inherited or gifted that a couple has used to pay for expenses when married qualifies as marital property. That means that during divorce, the gifted individual may have to share with their spouse. Most judges create a settlement in that the returns from these assets should cater for child and or spousal support.
When ending a marriage, the last thing on your mind would be your family trusts. However, ignoring trusts during divorce can lead to serious consequences in future. For instance, when you get to a point you have to negotiate property settlement, you are at risk of encountering high charges during the tax season. That is because during the tax season, estates receive settlements while trusts create distributions. As a result, ensure that you review your trust plan with a trust attorney in Utah. The attorney will guide you through the process of updating your trust documents to reflect the new status and your desired wishes.
