Income from Trusts in Divorce
If you receive income from a trust fund, you probably don’t want to share it with your spouse after your divorce. Fortunately, if you have lived in Utah long enough to file for divorce here, your trust fund is probably safe. However, under limited circumstances, your ex might have a claim to support from your trust fund.
The first question to ask is whether your trust income is property and, if so, whether it’s separate property. If your income comes from a revocable trust, the grantor has the power to change the terms of the trust at any time, including naming a new beneficiary. Therefore, you don’t have a property interest in the trust funds because you have no control over whether you continue to receive income. Similarly, if your trust income is subject to conditions or up to the discretion of a trustee, you have no property interest because you cannot demand payment notwithstanding the trustee’s decision. However, if the trust is irrevocable and you have an enforceable income interest, the court may consider the trust property.
Whether the trust is separate property depends on factors such as when it was created, who funded it, and where the funds came from. For the court to treat the trust as marital property, making it subject to equitable distribution, there would have to be evidence that at least one of the spouses created the trust with marital assets.
Perhaps the only situation you have to worry about in Utah is where you anticipate paying or receiving alimony or paying child support. The court considers your trust income along with your other earnings. If you’re in a position to pay spousal support or child support, you can anticipate paying your ex just a little bit more out of your trust income.
Successfully Negotiate a Divorce Settlement
Divorce can cause a lot of turbulence, both emotionally and financially, in a person’s life. Because of this, it’s important to act with great care during settlement negotiations, being assertive enough to look out for your own interests, but also amicable enough to avoid making the situation more contentious than it needs to be.
The following are a few tips that can help as you go through divorce settlement negotiations:
• Control your emotions. This is easier said than done, of course. Getting angry and shouting might feel great in the moment, but it also severely damages your chances of avoiding litigation, which means more time and expense. Remove anger and hard feelings from your negotiations as much as possible.
• Stay on top of your business. You need to get (and stay) organized, which means collecting relevant paperwork and ensuring you are meeting all of your deadlines. Have all of the information you need in organized files so you can quickly and easily access it when necessary.
• Get help. Simply put, you cannot get through divorce negotiations without the help of a professional. An experienced divorce attorney takes care of the most complicated legal business for you, and also helps you to stay grounded and at ease throughout the process.
• Don’t get greedy. In the vast majority of divorce cases, those involved do not come away with everything they want in the settlement. You must accept this reality if you wish to avoid drawing the process out much longer than it needs to last. Your divorce lawyer can help you set realistic goals and expectations, allowing the process to move forward efficiently.
Divorce Lawyer Free Consultation
If you have a question about divorce law or if you need to start or defend against a divorce case in Utah call Ascent Law at (801) 676-5506. We will help you.
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States
Telephone: (801) 676-5506