The degree to which assets held within a fiduciary arrangement remain separate from marital property during dissolution proceedings represents a complex area of law. Generally, property acquired during a marriage is subject to division, but assets held in trust may be excluded depending on several factors. For example, if a trust was established prior to the marriage, funded by the beneficiary’s separate property, and structured to prevent commingling of marital assets, it is more likely to be shielded.
Understanding the protections offered by these arrangements is vital for individuals seeking to safeguard inheritances, family businesses, or other significant assets from potential division in the event of a marital breakdown. The history of trust law reveals a continuous evolution, with courts adapting existing principles to address the specific challenges posed by divorce proceedings. These challenges often involve discerning the true intentions of the grantor, the beneficiary’s degree of control over the trust assets, and the impact of distributions on the marital estate.
