All Florida spouses are aware that a significant portion of any divorce involves negotiating the division of marital assets. In fact, aside from matters of child custody, property division is often cited as the primary focus within the divorce process. For individuals who plan to receive a sizeable inheritance, it is important to take steps to protect that wealth in case a divorce is on the horizon.
The best way to shield an inheritance from potential loss within divorce is to inherit assets within a trust. In terms of advance planning, this requires sitting down with the loved one who will leave the inheritance and discussing the best way to achieve that goal. A trust places a degree of removal between the assets themselves and the beneficiary of the trust.
To elaborate, when a trust is funded the assets that are placed within become the property of the trust itself. In this way, it is the trust, and not the beneficiary, that “owns” those assets. As such, the wealth held within the trust is not subject to loss from legal action, including divorce.
In order for this approach to be successful, there are a number of rules that must be followed. It is wise to discuss the matter with an attorney, who can provide guidance on how to create the trust and how to access the wealth held within. It is also imperative that the trust be structured well in advance, so that the protections are there if they should ever be needed. This may require Florida spouses to consider the ramifications of divorce at a time when the marriage is thriving, which can be difficult. However, an inheritance is meant to enhance the life of a loved one, and very few people intend for a large portion of that wealth to be lost within the property division portion of a divorce.
Source: CBS News, “5 reasons you need a trust, not a will“, Ray Martin, Sept. 17, 2015