Understanding Trust Funds In Divorce
Trusts serve a variety of purposes. They are frequently used as a means of gifting assets or protecting them, often to avoid certain taxes. In a divorce, a trust can be significant. How your trust will be treated in divorce depends on what type of trust it is, i.e., revocable or irrevocable as well as how and when the trust was funded.
A trust fund established for the benefit of an individual or a family may be considered marital property or may pass through the estate without qualifying it as marital or nonmarital. In certain circumstances, a revocable trust in Illinois could even be revoked in the event of a divorce. If you or your spouse is the beneficiary of a trust, it is critical that you seek representation from a highly qualified lawyer. The stakes can be extremely high in the case of divorce.
For skilled and experienced handling of significant assets in divorce, contact the Chicago lawyers at Lake • Toback • DiDomenico. We have considerable experience in marital dissolutions involving trusts, family-owned businesses and other significant assets. We are known for our aggressive advocacy, unflinching determination and strong record of results.
Our lawyers can also assist you in setting up trust funds for children’s educational expenses and other purposes during a divorce.
Is A Trust Fund Marital Property?
Whether or not a trust is marital property and subject to division is a complex issue that depends on many factors, including the type of trust, when it was funded and how it was funded.
For example, an inheritance is generally considered the property of the person who receives it, regardless of when it was received. However, if funds are distributed from a trust and commingled with marital property, they may become marital property. Funds in an irrevocable trust may be protected, while funds in a living, revocable trust are generally treated the same as any other asset. If a trust is funded with marital assets, it may be considered marital property regardless of the named beneficiary.
The line between marital and nonmarital property can become blurred in Illinois. Only a highly qualified divorce attorney can advise you about how a family law judge might classify your debts and assets. Given the significant discretion that courts have in dividing marital property, it is critical that you have a skilled divorce lawyer who can negotiate a favorable agreement on your behalf or, if necessary, make a compelling case on your behalf at trial.
Can Trust Assets Be Factored Into An Alimony Or Child Support Determination?
Whether or not trust assets can be factored into spousal support or child support will depend on how the trust is structured and funded. If a spouse has the ability to control the distribution of the trust, they could be factored in. Income that is generated from a trust can be considered when determining an individual’s ability to pay or need for alimony support. It is vital that you speak to an attorney to understand how trust assets will be handled.
Discuss Asset Division With Our Lawyers
Lake • Toback • DiDomenico is located in the heart of Chicago’s Loop. Our office is five blocks west of Lake Shore Drive and 10 blocks east of I-90/94, at the southeast corner of Washington and Dearborn streets. To contact our attorneys at Lake • Toback • DiDomenico, call 312-288-8985 or contact us by email.