Can Trusts Act as Financial Protection for Inherited Wealth?

When a couple gets married, they always hope that the union will be forever. However, as many North Carolina residents know, some marriages end in divorce, which leads to questions about marital property and division of wealth. In cases where one of the spouses has inherited money in a trust fund, the language of the actual trust might mean the difference between him or her being able to protect that wealth or having to share it with his or her ex-spouse.

Property division is decided based on state laws, which means that each state has clear guidelines as to what is considered marital property and what exceptions are allowed. Where trust funds are concerned, courts will generally honor the terms of the trust if the wording does not violate state law and it is within legal bounds. There are some exceptions, however, such as when a judge decides the terms of the trust are unjust or if the way it’s worded can be interpreted in a variety of ways. In those cases, the beneficiary can opt to appeal the judge’s decision, but the process can take a long time and become expensive.

In order for trust funds to be dispersed to the proper party, the benefactors need to be very clear about their intentions for the trust when they first establish it, including how different situations or scenarios would be addressed. Doing so will protect all the parties involved if the beneficiary of the trust gets married and then divorced later on.

If a beneficiary of a trust fund is going through the process of divorce, he or she might benefit from seeking support and guidance from a lawyer who can inform them about the state laws regarding the division of property during divorce. A lawyer can also assist people with seeking fair settlements and protecting their wealth.

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