divorce lawyers in indiana

Can a Trust Protect My Assets During a Divorce?

A Revocable Trust will not protect or exclude your assets in an Indiana divorce.  Since a Revocable Trust is revocable, meaning you still have control over the assets, your assets held in said trust is part of the marital estate.  An Irrevocable Trust, Limited Liability Company or Limited Liability Partnership might be entities available to shield assets from a divorce and creditors.  An Irrevocable Trust is a trust where you no longer have control over the assets, but are able to receive income for your benefit.

For your business or real estate, you may be able to transfer ownership in an LLC to your children and remain as the Manager, allowing control of the business without owning the underlying assets.  Protecting your assets in a divorce typically becomes an issue in the second marriage. You may have a business, acquired real estate and are concerned about the effects a divorce can have on assets you’ve spent your life acquiring that you want to pass to your children from the first marriage. To learn what options may be available, please contact one of our Indiana lawyers for a complimentary case review.  

 Timing Matters

 Placing your assets within a carefully designed Irrevocable Trust, LLC, LLP or other entity before you get married will help segregate those assets from the marital estate and shield them from an ex-spouse. The trust or entity becomes the owner of the assets instead of a spouse. If you want to know more about this form of legal protection, please contact one of our estate planning and business attorneys at Webster & Garino. Setting up a trust or entity for yourself before marriage does not require a future spouse’s approval, unlike a postnuptial agreement that requires agreement from both parties.   

Making a trust or setting up an entity after you enter a marriage may affect your ability to effectively shield assets from an ex-spouse. If transfers are made just prior to filing for a divorce, a judge may find that you dissipated marital assets.  Further if funds are commingled or your spouse has made contributions in your business or help acquire assets, then you may be opening yourself up to additional claims.

 Trusts and Legal Entities May Protect Business Owners

A Trust, LLC or LLP could help prevent your spouse from gaining control or management of your company.  Your Trust or legal entity can provide for Successor Trustees or management succession plans that could allow your spouse to receive income but limits his or her ability to actively manage the asset.  The type of trust or business entity could influence your ability to do this, which makes legal advice appropriate when designing a business asset protection system. 

 Spouse as Trust Beneficiary

 An irrevocable trust that names a spouse as a beneficiary cannot be altered because of a divorce. An ex-spouse who began as a spouse beneficiary will likely receive distributions under the terms of the trust. Naming a contingent beneficiary if the divorce occurs could protect against this outcome. 

 Limited Options After Marriage Unravels

 Divorce lawyers in Indiana often field questions about how to shield assets from a divorce once one begins. You basically cannot use a trust or business entity at this point to segregate assets from a marital estate because courts can interpret that as fraudulent conveyance. 

 Trust Income

 Assets within an irrevocable trust or business entity may be out of an ex-spouse’s reach, but income distributed by a trust or business entity can influence calculations for child support or spousal support. Many variables apply in these situations, and the advice of an Indiana lawyer can prepare you to protect your interests in court if this situation arises. 

 Divorce lawyers in Indiana are available at Webster & Garino. We can evaluate your position before or during a divorce and pursue an equitable settlement that represents your long-term financial interests. Contact us to schedule a complimentary case review at (317) 565-1818.


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