Protecting Trusts From Divorce in Maryland | What You Need to Know

estate planning

Trusts are a great tool for individuals who wish to preserve their assets for their children, grandchildren, and more. However, if someone establishes a trust and later gets divorced, without certain provisions in place, their trust may be subject to equitable distribution, thereby causing their loved ones to lose out on the assets that should go to them. Please continue reading and reach out to our experienced Maryland estate planning attorneys to learn more about how you can prevent this, and how we can help you through the legal process ahead. Here are some of the questions you may have:

Why should I avoid “finalizing” statements in my trusts?

When conducting most estate planning affairs, certainty is a good thing, and definite, finalizing language will be used. However, this is not always the case when it comes to creating trusts. For example, when you use phrases like “shall distribute,” it implies that, without fail, the beneficiary of the trust will, guaranteed, receive the assets. However, if you use phrases such as “may,” there is a very good chance that the judge will not view your trusts as an asset of marital property.

Can the number of beneficiaries on a trust save it from equitable distribution?

Fortunately, under several circumstances, you can save your trust from equitable distribution if you name multiple beneficiaries on it. This will signal to the courts that the trusts were definitely created other than for the benefit of one person.

Are there alternatives to direct distribution?

There are various alternatives to direct distribution, all of which may help persuade the courts into believing that the assets in the trust should not be subject to equitable distribution. For example, if you keep your assets in a trust and have a trustee manage that trust, courts may not consider that trust to be marital property. Additionally, if you write specific triggering events in your trust regarding its distribution, those assets will not be protected anymore, which means that generally, it is best for the trustee to make payments on behalf of your beneficiary instead of directly distributing funds from your trust to your beneficiary. For any additional questions about how to keep your trusts safe from divorce, please do not hesitate to give our experineced Maryland estate planning attorneys a call today. We are always here to help.

Contact our experienced Montgomery County, Maryland firm

The attorneys at JD Katz have years of experience compassionately guiding clients in Maryland through the estate planning and administration process. Our firm also has experience with matters of elder law, business law, tax law, and litigation. For a legal team that will put your needs first, contact JD Katz today.