In Minnesota, trusts are often overlooked assets in divorces. A trust could either be set up by the parties themselves before or during the marriage or set up by someone else for the benefit of one or both of the parties.
Just because an asset is placed in a trust does not necessarily mean that it is no longer part of the divisible marital estate. There are certain factors that a court can look at to determine both the nature and extent of the trust asset, including what type of classification should be attributed to it for purposes of the divorce and also whether or not the income from a trust should be factored into child support and spousal maintenance decisions.
While it is unknown exactly how many trusts are in existence today, with many wealthy individuals undertaking proper estate planning, it is safe to say that there are a number of trusts out there which can be, and should be, addressed as part of a divorce proceeding.
If you are getting divorced and one or both of the parties are owners or beneficiaries of a trust, to obtain competent legal advice by lawyers who understand how trusts are created and how to attack or invade trust property (or protect it if that is the case) and analyze the issue in the most efficient and cost-effective manner possible.
Andrew M. Tatge is a partner and chair of the Family Law and Divorce Practice Group at Gislason & Hunter LLP (www.gislason.com). He regularly represents farmers, business owners, professionals, and other high income and high net worth individuals (or their spouses) in divorce and related actions. He also writes and speaks regularly on divorce issues related to the family farm and has presented seminars on Divorce for Farmers and Dividing Trust Assets in Divorce on behalf of the National Business Institute. Andrew can be reached at email@example.com or (507) 387-1115. This information is general in nature and should not be construed as tax or legal advice.