Protect your Assets with a Trust During Divorce

When divorce seems eminent, husbands and wives without a prenuptial agreement will normally end up giving half of the possessions acquired during the marriage to their spouse. This can be a great loss for men and women who don’t have much or prize what little resources they do have. Yet there is one way that you may be able to protect your finances and assets from division by divorce.

You will need to establish a financial trust in order to make this happen. According to Forbes, assets that are placed in a trust that was established before marriage are normally protected. They will be treated as your separate property, and will not be entangled with the money you shared with your spouse. Trusts are ideal because you don’t need approval from anyone else to set one up. Single or engaged women and men can put their money in a trust and know that it is locked away for them when they need it most.

There are a variety of different trusts that can be utilized for your asset protection. If you own some sort of business, then you should think about a Domestic or Foreign Asset Protection Trust. This kind of trust allows you to transfer the ownership of your property into a separate trust. That way, you can protect your company from being divided between you and your ex. In some states, assets that are placed in a trust prior to marriage are a no-contest item that solely belongs to the spouse who established the trust.

As well, you can place your properties in a discretionary trust and avoid having to pay alimony out of that medium. Trusts are managed by a trustee, and should you become incapacitated or pass away you will pass on all of that money to the trustee to use in your favor. In some cases, a spouse will establish a trust and declare that his or her husband or wife is the beneficiary.

When the couple divorces, sometimes the spouse will need to pay spousal support out of the trust. These situations can be complicated, and are evaluated on a case by case basis. However, in most cases you won’t need to pay alimony out of the trust. Talk to a Lawyer in your state about setting up a trust fund if you are preparing for marriage or are trying to protect your assets from divorce.