Going through a divorce in Illinois is often challenging for formerly married adults. One difficult aspect of divorcing involves your assets. Fortunately, a trust can sometimes offer the asset protection you seek.
Placing your assets in a trust
One potential way of protecting your assets before a divorce is by placing them in a trust. However, you must be careful about setting up a trust and moving money into it. Understandably, courts and legal experts don’t want someone using a trust to hide their assets.
If you plan to create a trust, it’s best to choose an irrevocable trust over one that’s revocable. If you open a revocable trust, your former spouse and this person’s legal counsel might try to stop this from happening. You could easily place and withdraw assets from a revocable trust.
On the other hand, an irrevocable trust has more strict requirements. For instance, you can’t modify, amend, or terminate an irrevocable trust without the permission of its beneficiaries. That said, there’s no guarantee that an irrevocable trust will safeguard your assets. If a court rules in your ex-spouse’s favor, this individual can gain a legal right to some of a trust’s assets.
Is Illinois a community property state?
Marital property is a term used to describe assets acquired during a marriage. Illinois is not a community property state, meaning it doesn’t force couples to split all marital property equally. However, it’s still smart to do whatever possible to protect your assets in a divorce.
No one wants to see their hard-earned assets up for division in a divorce. If you can’t establish a prenuptial or postnuptial agreement with your spouse, setting up a trust might be the best way to protect your assets.
