10th Sep 2019
During a divorce, the motive to ensure the future well being of those you love can commingle with the motive to deprive your spouse of undue rewards. There are no last-ditch ways to secretly take assets off of the negotiating table in preparation for a divorce. Not only will attempts to do so make you look bad in discovery, but these efforts may also create an unfavorable ruling and long-term damage to your relationships. There are, however, legitimate steps you can take regarding your will and trusts to safeguard money for other loved ones and from your spouse in the future.
You have probably thought of taking your spouse out of your will already. But what if you’re in a coma? Does your spouse have a durable power of attorney to manage your affairs until you’re fit to make those decisions again? You should make sure to revoke power of attorney and have your attorney notify your spouse of these changes. You may have simply authorized your spouse to have power of attorney regarding healthcare. Many clients don’t want their aggrieved ex-spouses making life or death decisions for them anymore. If you aren’t sure who has power of attorney in all matters, this is a good time to check. These are matters Semmes can efficiently review and settle for you prior to divorce.
When you remove your spouse from your will (as much as the state will allow, at least), you’ll need to think through who the heirs will be and how they will handle the sudden influx of inheritance when the time comes. Sometimes, giving money outright to a minor child or adult child can be disastrous.
- A minor child’s inheritance may be put in the care of, you guessed it, the surviving spouse, with no strings attached.
- An eighteen-year-old can inherit hundreds of thousands of dollars to indulge all of their 18-year-old priorities.
- Creditors and ex-spouses of the adult child can take the money in court
A revocable or irrevocable trust may be able to address these issues, but read on to find out important details.
Trusts are a way to safeguard assets for beneficiaries with provisions for distribution. Arranging for your children’s inheritance to go to an irrevocable trust upon your death is relatively simple for your attorney and can be done during your will amendments prior to divorce. Creating a trust now with current assets may be difficult. If a court finds that you have attempted to create a trust (even if your children are the beneficiaries) simply to take money away from the grasp of a spouse, they may dissolve it.
If both you and your spouse have an interest in safeguarding certain assets for your children, have your attorney begin the process of setting up an trust with both of your approval. You can both have peace of mind that nothing will rob your children of the assets you’ve built for them together.
There are, of course, other purposes for trusts for you and your spouse. If you already have a revocable joint trust with your spouse, it is probably best to dissolve it and inform them. The assets will go back into the marital pool of assets to be divided. Revocable individual trusts for which you are the trustee and beneficiary can create more nuanced issues during divorce. These issues are common to everyone going through a divorce, but they can become complex depending on your situation. Relying on causal advice from others to rearrange assets, wills or trusts can cause more harm than good for everyone involved. Always consider your options under advisement from an experienced divorce attorney.
Contact the team at Semmes Law here or call 251-317-0117 to see how we can help you navigate through the divorce process.