Many assume a trust automatically protects wealth during a Florida divorce. In reality, courts apply strict equitable distribution laws to these accounts, dividing anything deemed marital property. Discovering whether your assets are vulnerable or secure starts with the type of trust you hold.
What if you have a revocable trust?
If you created a revocable living trust before marriage, the court may consider those trust assets as nonmarital property. However, if you and your spouse established and funded the trust using earnings obtained during the marriage, the court may consider them marital property. Additionally, adding marital funds to a pre-existing trust may blur the line between marital and nonmarital property, which could affect how the court classifies those assets.
What if you have an irrevocable trust?
Whether it is an irrevocable trust created before marriage or after marriage, upon its creation, you are no longer the legal owner. As a result, the assets associated with it are not subject to division. However, if you fund an irrevocable trust with marital assets during the marriage without your spouse’s consent, the court may still factor the value of those assets into the equitable distribution of your marital estate.
What if you are a beneficiary of a third-party irrevocable trust?
If you are the beneficiary of a trust that your parents or another third party created, the court usually considers the trust assets as your separate nonmarital property. However, if you mix trust distributions paid during marriage into joint accounts or use them to buy joint property, you may lose that separate status during equitable distribution.
Protecting your trust assets during a Florida divorce
How the court labels your assets depends heavily on your paperwork and financial history. A divorce attorney helps gather the right proof to show which assets are nonmarital under Florida law. They can also explain your risk, protect your legal rights and guide you through property negotiations so you do not lose what is yours.