An established legal structure, designed to manage assets with specific terms that cannot be easily altered, may encounter complexities when marital dissolution occurs. The assets within this structure are generally considered separate from the marital estate, meaning they are typically not subject to division during divorce proceedings. However, the establishment of such a structure close to the divorce, or where marital assets were used to fund the trust, may create legal challenges.
The significance lies in asset protection and long-term financial planning, safeguarding assets from potential creditors and ensuring their distribution according to the grantor’s wishes. Historically, these arrangements have been employed to preserve family wealth across generations, offering a degree of financial security and shielding assets from certain liabilities. Furthermore, the purpose behind establishing the trust, and the timing of its creation relative to the divorce, are important factors in determining its treatment during divorce proceedings.
