No matter how carefully you plan your financial resources, divorce can turn them topsy-turvy. A living trust can help keep you on an even keel. By putting properties in a revocable living trust, you can keep them from mixing with the cash and properties you and your spouse co-own. That decreases the possibility of your partner claiming them in a divorce.
Setting Up the Trust
To safeguard your possessions, you ought to create the trust prior to you tie the knot. Each state has its own requirements, but the essentials are universal. You complete the trust documentation, calling yourself as trustee, and say who acquires the possessions when you pass away. You sign the documents in front of a notary. Then you move title to the assets you are fretted about– brokerage accounts, your home, whatever– from your name to the trust’s name. As trustee, you still regulate them.
Separate and Marital
In theory, whatever you own when you get hitched stays your home, not your spouse’s. Real life can mess up that concept quickly. If you commingle funds– depositing marital income in your separate account or obtaining his money to spruce up your house– that might offer him a claim on the home. The trust makes a clear boundary in between exactly what’s yours and exactly what’s yours and his, making it much easier to prevent commingling funds.
A prenuptial agreement can provide you comparable defense to a living trust. You and your spouse create an agreement specifying who owns what and who walks away with which possessions if you broke off. A trust has one big advantage, though: You can set it up without your spouse accepting it or even understanding about it. A prenuptial contract, nevertheless, can set out the guidelines for the amount of alimony either of you pay when you divide. A trust cannot do that.
After You are Hitched
If you set up a trust after you tie the knot, you may face another set of issues. Some couples established joint trusts to provide for their youngsters if they pass away. If a joint trust includes different assets, that may be enough to turn them into jointly owned home. Putting home in a trust of your own after the wedding event does not necessarily verify that it’s 100 percent yours. Such a trust can make division in divorce harder instead of much easier.