Couples who manage to accumulate wealth and experience a certain lifestyle during their marriage could be in for a surprise in the event of a divorce. A high asset divorce in North Carolina can have a dramatic effect on the lives and finances of the parties. Retirement plans might have to be changed in light of the asset division, associated with a marital dispute.
An offshore account might be one method someone might consider as a way to hide money from a spouse in anticipation of a dispute over an asset division. Such conduct might conflict with financial disclosure rules designed to prevent one spouse from hiding assets to circumvent an asset division. Trusts, however, might offer a method for parents to allocate assets to their children while shielding the assets in the event of their own divorce or the divorce of one or more of their children.
Setting up an irrevocable trust in which the beneficiary does not control the distribution of the assets or income of the trust is one method of protecting the assets from the beneficiary’s spouse in a divorce. Some courts limited the effect of income distributions from a trust on spousal support requests by ruling that only those payments actually made in the past to the spouse could be taken into consideration. The theory applied by the court was that future payments, if any, were not within the control of the spouse seeking spousal support.
Whether real estate and other assets in a trust become marital property in a divorce dispute depends upon many factors. Individuals contemplating the creation of a trust for their children, or individuals involved in a divorce in which an irrevocable trust might be an issue, might benefit from consulting with an attorney familiar with complex asset division.