Fear of a compromised financial future is common during divorce. Understanding the fear—and knowing what to do about it—is essential.
Because of the requirement to divide debt and assets during divorce, couples of all ages are concerned about getting their fair share. For individuals closer to retirement, the need is more urgent with fewer years remaining to rebuild a nest egg.
With longer term marriages, a significant disparity may exist between the earning potential of spouses. For a less-monied spouse who has been out of the workforce, financial worries can include:
- An incomplete picture of the assets and income of the household
- Lack of knowledge about household debt load, leading to unfortunate surprises when the true financial condition becomes known
- A poor understanding of the household budget and lifestyle costs
- Insufficient individual credit history
- Financial and other threats made by a partner in hopes of securing unfair agreements, unfair child custody or financial arrangements
Each of these fears is realistic but can be addressed with assiduous homework and by retaining skilled legal counsel. Consider these tips to fight financial fear during your divorce process:
- Become informed: Review and copy bank, tax, investment and other statements. Review the checkbook and credit card statements to understand what you need to move forward.
- Check your credit: Order a credit report. Review and close unneeded or joint accounts. An unused home equity loan can lower your credit score and leave you financially vulnerable. Apply for credit in your own name if you have not already done so.
- Retain legal counsel: Work with experienced, aggressive legal counsel to protect your rights, finances and future.
When Does a Spouse Have Rights to a Revocable Trust?
For numerous reasons, individuals or couples may choose to place property in revocable trusts. These trusts hold the property during the grantor’s lifetime and then pass that wealth onto heirs when the grantor dies. When a trust is revocable, the grantor can change the terms, including the named beneficiary, at any time. The question for couples going through a divorce is whether a grantor spouse can amend the trust to remove the other spouse as beneficiary. The answer depends on the original terms of the trust, the timing of its formation, and the source of the assets that funded the trust.
If both spouses are named as grantors, the court will operate under the presumption that the trust funds are marital property and should be divided equitably. But if only one spouse established the trust, it is possible that the trust is separate property, and the grantor spouse might be free to amend its terms.
However, the signature on the trust might simply be a formality. What’s more important is when the trust was established and where the funds came from. If a grantor formed the trust before the marriage and only added the spouse as beneficiary in consideration of marriage or after the wedding, the court could treat the trust and its funds as separate property. If the grantor formed the trust during the marriage, he or she would have to show that only separate property funded the trust. If the grantor used joint assets at any time to fund the trust, the court will consider it marital property and divide it equitably.
Finally, the court can use trust income as a factor in determining child support and alimony.
Free Consultation with Divorce Lawyer in Utah
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 fight for you.
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States
Telephone: (801) 676-5506