Trust Fund Division Attorney in Friendswood, TX
While many people believe that a trust is largely untouchable by outside parties, the courts may consider whether the funds in a trust are community or separate property during a divorce. Navigating the complexities of these types of cases requires the legal services of a Friendswood trust fund division lawyer who understands the state’s trust fund division laws and how to protect the assets of clients during trust fund division cases.
Why You Should Choose The Law Offices of Tad Nelson & Associates?
The Law Offices of Tad Nelson & Associates provides results-driven legal representation to clients seeking protection for their trust fund during a divorce. Whether you have concerns that your soon-to-be ex is concealing assets through a trust or wish to protect your own assets, our legal team has the experience and legal knowledge to develop and implement a legal strategy that works to protect your rights and further your goals in court.
Setting our firm apart is our focus on individualized legal services. We understand that no two cases are the same, and we set aside considerable time and resources for our clients. When you work with our industry-leading law firm, you gain an unwavering ally who places your interests first and will do the work necessary to see that you achieve your aims in court.
Understanding Trust Funds in Divorce
Trust funds often become a point of contention in high-asset divorces. They are often part of an estate when one or both spouses have substantial inherited wealth or long-term estate planning tools. A trust can shield certain assets from division, depending on how and when it was structured and whether it is classified as separate or community property.
Trusts in Texas generally fall into two categories: revocable and irrevocable. A revocable trust allows the creator to make changes or dissolve the trust during their lifetime. An irrevocable trust cannot be altered once it is established. Other types of trusts include living trusts that are created during a person’s life and testamentary trusts that are created through a will after death.
In places like Friendswood, where wealth and estate planning are commonplace, understanding how trusts work and how they are treated during a divorce is key to reaching a fair settlement.
Nationally, Americans are split on which estate planning tool works better. While 47% favor trusts, 53% prefer wills. Even with the favorability of trusts, only 17% of Americans have established a trust.
In the Houston area alone, there are approximately 81,800 millionaires, and many of them use trusts to preserve wealth. Friendswood neighborhoods like West Ranch, Friendswood Lakes, and Eagle Lakes often include families with complex estates and trust arrangements that are handled through the Harris County Civil Courthouse.
Are Trust Fund Assets Subject to Division in a Divorce?
Not all trusts are subject to division in a Texas divorce, which is why you should consult with a knowledgeable attorney if your divorce involves one or more trusts. The courts consider how the trust was created and how it was funded. They may also examine how it was used.
A revocable living trust that was established during the marriage and funded with community property is typically subject to division, especially if both spouses contributed to the trust or benefited from it during the marriage. In that case, the courts may view that type of estate planning tool as part of the marital estate.
Other types of trust may be inherently separate property and not subject to division through the courts. Irrevocable trusts that are created by a third party are generally not divided. This type of estate planning tool is typically excluded from property division since the beneficiary does not have control over the trust assets.
The court can still consider distributions from the trust when determining things like spousal maintenance or property division. If a spouse creates and funds an irrevocable trust with community property, a court may still evaluate its inclusion in the marital estate.
What Are My Options for Dividing an Estate That Involves One or More Trusts?
If your divorce involves one or more trusts, the most important factor that determines how your trusts are affected is whether the trust contains community or separate property. During any divorce, the burden of proving that property is separate falls on the party making that claim. You can work with your attorney to prove that the trust was created and remains maintained by a third party or that it was funded using separate property.
If your estate includes a trust that was funded with community property or was set up during the marriage, the value of the trust will likely be added to the community property “pot” that is then subject to division. If one spouse used separate property to fund or improve a trust that the other spouse retains following the divorce, the contributing spouse may be entitled to reimbursement for their contribution.
Anyone seeking to maintain that trust in its current form would have the option of trading other assets within the marital estate in return for their spouse’s share of the trust interest. This type of arrangement can preserve the estate from liquidation or restructuring. It is important to remember that payments from a trust fund are considered income by the court, and those payments could play a key role in how support obligations and estate division matters are decided in court.
Hire a Trust Fund Division Lawyer
If your marital estate has one or more trusts, your first course of action should be to hire a trust fund division lawyer who understands the state’s trust fund division laws. A Friendswood trust fund division attorney brings years of experience handling trust fund division cases and ensuring that their clients’ rights are protected throughout a divorce.
A trust fund division lawyer can explain whether or not your trust may be subject to division. They can guide you through the complexities of trust asset division by ensuring a proper valuation of your assets while complying with the law. If your spouse is using a trust to unlawfully hide assets, your attorney can take steps to compel them to comply with court-ordered disclosures.
FAQs About Trust Fund Division
Are Trust Funds Considered Community Property in a Texas Divorce?
Trust funds are usually not considered community property in a Texas divorce. They are generally considered separate property, but the specific classification depends on how and when the trust was established.
If the trust was created before the marriage and remains untouched, it may be protected from division during a divorce. However, in Friendswood divorces, judges closely examine trust terms and distributions. Commingling can convert trust assets into community property, which is then subject to division.
Can a Spouse Claim a Share of My Trust Fund During Divorce?
A spouse cannot claim a share of your trust fund during divorce if it’s legally separate property. However, if the trust provided income used for marital expenses, that income could be considered community property. Friendswood courts examine the trust structure, distribution history, and financial records when determining how a trust is handled during a divorce.
How Do Courts Handle Trusts That Were Created Before the Marriage?
Courts typically handle trusts that were established before marriage by classifying them as separate property. If income from a trust was used during the marriage, or if the trust was altered, that could affect the classification. Friendswood judges evaluate how the trust functioned over time. Keeping distributions separate and documented can ensure the trust’s legal protections during property division in a divorce.
What if a Trust Generated Income During the Marriage?
Income generated by a separate trust during the marriage may be treated as community property, depending on the trust’s structure. Friendswood courts assess whether the income was distributed, reinvested, or spent on shared expenses. If the income benefited both spouses, it may be subject to division. Divorces involving one or more trusts are often highly complex and require legal support from an experienced Friendswood family law attorney.
How Can I Protect a Trust Fund From Division in Divorce?
To protect a trust fund from division in divorce, avoid commingling distributions, closely follow the terms of the trust, and maintain clear financial separation of how the trust operates. In Friendswood, high-net-worth individuals often use prenuptial agreements and separate accounts to shield trust assets. Courts respect and enforce proper trust structures, but poor handling of estate planning tools can weaken those protections.
Speak With a Friendswood Trust Fund Division Lawyer You Can Rely On
Dividing trust assets in a divorce often requires careful analysis of the estate planning tool’s ownership, timing, and intent. Whether you’re concerned about inherited property or trust income, an attorney who understands complex asset structures can protect what’s rightfully yours.
At The Law Offices of Tad Nelson & Associates, our family law attorney, Amber Spurlock, is a graduate of South Texas College of Law and a former U.S. Air Force Assistant Staff Judge Advocate. She brings clarity to these high-stakes disputes. Her disciplined, detail-focused approach ensures your financial future is never left to chance. Contact The Law Offices of Tad Nelson & Associates to discuss your options for trust fund division in your case.