While it might be the last thing on your mind when your marriage is ending, a divorce is a time to break open your financial portfolio and take stock of what you own. The divorce court does this before giving you a decree; you want to be prepared. In general, the court divides your marital assets between you and your spouse and lets each of you keep all of your nonmarital assets.
So, what does this mean if you or your spouse has a trust? Are trusts considered marital property? The answer depends on how the trust was created, what assets it holds, and when and why it was established. We can help you find answers to these questions and put you in the best legal and financial situation in a divorce. Beller Law, PL, has over 25 years of experience safeguarding Florida residents during family law proceedings, and we can help you thrive in trying times.
How Do Florida Divorce Courts Distribute Assets?
When couples divorce in Florida, the court must divide their property and liabilities. The courts follow a process called equitable distribution, which means marital property is divided fairly, though not always equally, between the spouses. The goal is to ensure that both parties leave the marriage on a stable financial footing.
Before it decides each spouse’s share of the property, the court must determine which assets are marital and which are nonmarital. Part of the process might include the court requiring you to take an extensive inventory of your possessions and appraise them to determine their status.
What Counts as a Marital Asset?
The court looks at several factors to determine how to divide marital assets, such as:
- Each spouse’s contributions to the marriage,
- Each spouse’s economic circumstances, and
- Whether either spouse wasted or hid assets.
Marital assets are typically anything acquired or earned during the marriage, regardless of whose name is on the title. Common examples include:
- Income earned by either spouse during the marriage;
- Homes, vehicles, and investments purchased during the marriage;
- Retirement accounts or pensions accumulated while married; and
- Businesses started or grown with marital funds.
Florida law presumes that any asset acquired during the marriage is marital unless proven otherwise.
What Counts as a Nonmarital Asset?
Nonmarital property belongs solely to one spouse because they acquired it before the marriage, as a separate gift or inheritance, or after filing for divorce. You do not divide these assets in a divorce.
Examples include:
- Property owned before the marriage,
- Inheritances or gifts given to one spouse alone,
- Assets defined as separate in a valid prenuptial or postnuptial agreement, and
- Income from nonmarital property if it’s not commingled with marital funds.
So, are trusts considered marital property? Let’s take a closer look.
Does a Trust Protect Assets from Divorce?
Trusts are sometimes protected from divorce. One main factor is whether the trust is considered marital or nonmarital property.
When a Trust Is a Nonmarital Asset
A trust is typically nonmarital and protected from divorce when it’s:
- Created before the marriage, using assets owned solely by one spouse;
- Funded with an inheritance or gift intended for one spouse only; or
- Established by a third party, such as a parent or grandparent, for the benefit of one spouse.
Whether you’re looking into inheritance trusts and divorce, or trusts you set up on your own with nonmarital assets, we can help you navigate the process to help you maintain the nonmarital status of the trust.
When a Trust Becomes a Marital Asset
In several scenarios, a trust may be treated as a marital asset. The key question is whether marital funds or efforts contributed to it.
A trust might be marital if:
- It was created during the marriage using marital funds, or
- Marital money or labor increased the trust’s value.
If you use a nonmarital trust fund distribution to buy other property, that property is also typically nonmarital. But if you commingle nonmarital trust funds with marital property, what you commingle might be subject to equitable distribution in a divorce.
Can I Put My House in a Trust Before a Divorce?
Yes. However, putting your home in a trust doesn’t necessarily make it divorce-proof. If you purchased your home with money you earned after marrying or your spouse’s actions helped you pay the mortgage or increase the property value, a trust probably won’t fully shield the home from an equitable distribution.
Frequently Asked Questions About Trusts and Divorce in Florida
Is a trust part of marital assets?
A trust may or may not be part of marital assets, depending on how and when it was created. If the trust was funded with marital income or assets acquired during the marriage, it’s likely subject to division in a Florida divorce. But if it was established before marriage or funded with nonmarital property, it’s usually protected and considered separate.
Can your spouse go after your trust?
It depends on how and when the trust was created. If the trust was established before marriage and funded with nonmarital assets, it’s usually protected. However, if marital income or contributions increased the trust’s value, or if the trust was created during the marriage, your spouse may have a claim to part of it in a Florida divorce.
Are trust assets protected from divorce?
Trust assets are generally protected from divorce if they qualify as nonmarital property—meaning they were created before marriage, funded with inheritance or gifts, or established by a third party. But if marital funds or labor enhanced the trust’s value, a Florida court may consider part of it marital and subject to equitable distribution.
What money can’t be touched in a divorce?
In Florida, nonmarital money usually can’t be divided in a divorce. This includes assets owned before marriage, inheritances, personal injury awards, and gifts made to one spouse only. Keeping these funds separate from joint accounts helps preserve their protected status. Once mixed with marital money, they can lose their nonmarital protection.
Can a spouse hide assets in a trust?
No. Hiding assets in a trust during divorce is considered fraudulent and can lead to serious legal consequences. Florida courts require full financial disclosure, including any trusts. If a spouse transfers assets into a trust to conceal them, the court can void the transfer, impose penalties, and award the other spouse additional compensation.
Trusts Require Careful Legal Analysis
Getting tailored legal advice is essential if you’re wondering whether your trust will be considered marital property or if you want to create one to protect your assets.
Are trusts considered marital property in Florida? You might have to pore over title documents, financial statements, and property agreements to answer that question and determine how to protect your property. With decades of experience in Jacksonville and across Northeast Florida, our team has guided countless clients through complex divorce and trust matters, helping them protect what matters most. Our knowledgeable attorneys can do this work for you.
Contact Us Today
At Beller Law, PL, we help individuals and families across Florida safeguard their wealth, navigate complex divorce issues, and protect their legacies. We have multiple decades of experience and are top-rated advocates. If you’re wondering whether trusts are considered marital property in Florida, our legal team can help you identify what’s protected and what’s subject to division. Contact us online or by phone today to discuss your unique situation.
Resources:
- OSCA/OCI’s Family Court Case Law Update March 2011, Orloff v. Orloff, 67 So. 3d 271, (Fla. Dist. Ct. App, 2011), p. 8, link.