Can a Trust Protect My Assets in a North Carolina High Net Worth Divorce?
For many spouses, protecting their assets is the number-one priority when going through a divorce. This priority becomes even more important when dealing with a high net worth divorce. If you are going through a separation in Charlotte, you may be wondering whether a trust can protect your assets from being taken away. For many years, trusts have been considered one of the most reliable means of protecting one’s assets, especially during a divorce, but is this really true in North Carolina?
If you are trying to protect your assets in a high net worth divorce, you should seek assistance from a qualified, experienced divorce attorney in Mecklenburg County as soon as possible. These legal professionals can utilize a wide range of tactics and strategies to make sure your property remains in your hands. They can also explain a number of different issues, such as the effectiveness of your trust during a divorce. If you are concerned that your trust may not withstand legal and financial scrutiny during equitable distribution, a divorce lawyer can help you put your mind at ease.Separate vs. Marital Property
When approaching the process of equitable distribution in North Carolina, the first step is to divide all property into two separate categories:
- Separate Property: This is property that you accumulated before the marriage took place. Some additional property such as inheritance also classifies as separate property. Unlike marital property, separate property is not subject to equitable distribution. In other words, you keep all of your separate property after a divorce.
- Marital Property: This is property that you accumulated during your marriage. This property is all subject to equitable distribution, which means you may lose significant portions of it during a divorce.
In order to determine whether your trust is separate or marital property, you need to think about when the trust was established. If you started your trust before the marriage, it is separate property. If it was established during the marriage, then it may be classified as marital property instead.
That being said, your spouse may attempt to get access to your trust, even if it is classified as separate property. They may try to use a range of arguments in the courtroom in order to convince the judge or jury that they deserve access to these funds. Even if they fail to accomplish this, your spouse may turn around and argue that they deserve more of your marital assets. They may justify this by saying that since you have access to such considerable wealth in your trust, they deserve much more than 50% of the marital assets. This is obviously something you want to avoid.Drafting a Rock-Solid Trust
Besides drafting a trust before the marriage takes place, there are a number of additional factors you should keep in mind. First, you should never take money out of a trust if you want these assets to remain protected. As soon as funds leave the “protection” of a trust, they may be viewed as marital property. You should also set up your trust in a way that prevents your beneficiaries from demanding a distribution. If they cannot demand a distribution, then it is not considered “their” money.Using a Domestic or Foreign Asset Protection Trust
Another solid tactic is using a domestic or foreign asset protection trust. If you are a business owner, you can use this type of trust to transfer the ownership of all your separate property into a separate trust, including your company. This creates a situation in which the trust owns your company, not you. This means that your spouse would never be able to take the value of your separate property into account when calculating things like alimony, child support, or equitable distribution. If you have a company that is worth millions of dollars, the benefits of such an arrangement could be tremendous. Keep in mind that you must be single in order to set up a trust like this and reap the benefits. In other words, you must do this before you get married.Enlist the Help of a Qualified Divorce Lawyer Today
If you have been searching Mecklenburg County for a reliable, experienced divorce attorney, look no further than Arnold & Smith, PLLC. We have considerable experience with high net worth divorces in Charlotte, and we know how to approach trusts and other complex assets in an efficient manner. If you are serious about protecting your assets, it makes sense to trust only the best legal professionals available. Reach out today, and we would be happy to assist you.