Can a Trust Protect My Assets in Divorce?
If you are considering getting a divorce, you may be wondering how the divorce will affect your assets. There are many tools you can use in estate planning to protect your assets, and a trust is one of them. But can a trust be set up to protect your own assets in the event of a divorce in the state of Wisconsin?
The answer to this question depends on when the trust is created and where the funds for the trust are coming from. The skilled Wisconsin divorce attorneys at Bandle and Zaeske, LLP are here to help you protect yourself in a divorce.
Wisconsin—A Marital Property State
The state of Wisconsin is considered a marital property state. This means that once a couple gets married, the assets of the marriage generally become “marital property,” and are equally owned by each spouse. This concept was established by Wisconsin’s Martial Property Act of 1986.
When Is an Asset Not Considered Marital Property in Wisconsin?
Though it is generally the rule that all assets each spouse owns are shared equally in the event of a divorce, there are a few exceptions to this rule. These exceptions include gifts given to one spouse and an inheritance left to one of the spouses. Additionally, a spouse may receive some credit for assets that spouse owned going in to the marriage.
Protecting Your Own Assets from Becoming Shared Assets with Your Spouse
There are certain circumstances which you must be careful of if you intend to keep your own assets separate from your spouses to protect yourself in a divorce. For example, if a relative passed away and left you a home in their will, you may open that home up to equal division with your spouse in a divorce if you added your spouse’s name to the deed of the home.
Another example of how an asset may end up being considered marital property would be if you were gifted a significant sum of money, such as $20,000, and you deposited the funds into a joint bank account that you own with your spouse, this money may then become an asset both of you own. It will then be considered marital property and subject to an equal division in a divorce.
Can I Protect My Assets in a Divorce Through Creating a Trust?
Depending on the circumstances, trusts can be a useful way of protecting your assets. However, trusts that have been established after the marriage, particularly those created with shared marital funds, will often be considered marital property and may be divided equally in the event of a divorce.
Protecting your assets in a divorce can be complex, and the methods available to you vary depending on whether or not you are already married and the source of the assets. Contact one of our experienced Wisconsin divorce attorneys at Bandle and Zaeske, LLP by phone at 414-359-1424, or by email today to schedule a free consultation. We work with clients throughout Milwaukee County, Ozaukee County, Racine County, Washington County, and Waukesha County