The intersection of wealth preservation vehicles and marital dissolution proceedings often presents complex legal challenges. These challenges typically arise when one or both parties in a divorce have an interest in assets held within a fiduciary arrangement established to manage and protect wealth for beneficiaries. For example, a spouse may be the beneficiary of a structure established by their parents, with distributions intended to provide ongoing financial support.
The significance of understanding these interactions stems from the potential impact on asset division during divorce settlements. The determination of whether assets are considered marital property subject to division, or separate property belonging solely to one spouse, has substantial financial implications. Historically, such instruments were viewed as untouchable, but evolving legal interpretations necessitate careful examination of the trust’s terms and the beneficiary’s control over the assets. A clear understanding of relevant state law is crucial to appropriately evaluate the assets and their disposition in a divorce settlement.
