Atlanta Divorce and the Role of Trust Accounts
Parents often want to leave their children with some sense of financial security. As a result, some people are provided with homes and other forms of property by their parents, while others are named beneficiaries of trusts.
Trusts often offer a level of protection not present with other gifts. For example, trusts may include provisions regarding distribution to help ensure that the beneficiary will be mature enough to handle the funds when they are provided.
But what happens to trusts when divorce occurs? Depending on how they are structured, this asset could be considered divisible property.
How Divorce can Impact a Trust
Although there are many types of trusts, they often fall within one of two broad generalizations: discretionary or support trust. A discretionary trust distributes assets based on the sole discretion of the trustee. A support trust includes provisions allowing payment to maintain a certain standard of living as well as providing funds for health, education and maintenance.
A discretionary trust provides the highest level of protection. Unfortunately, many people are wary of this type of trust because it provides the trustee managing the account with a great deal of power. Although this is true, this form of trust is far more likely to be shielded from a divorce proceeding.
During a divorce proceeding a court may interpret a support trust to provide care not only for the intended beneficiary, but also for a minor child or spouse. Trusts with support provisions have been successfully protected in numerous court cases, but the cost of litigation is high.
Determining how assets are distributed during a divorce proceeding is difficult, and the inclusion of various trusts on either side can be even more problematic. As a result, it is important to contact an experienced Atlanta divorce attorney to review your unique situation and protect your legal rights.