Legacy "Dynasty" Trusts & Divorce

Posted By Eiges & Orgel, PLLC || 5-Nov-2013

Parties to a marriage set up Legacy trusts in order to be able to avoid the claims of creditors avoid estate and gift taxes. These trusts can run in perpetuity in certain states such as South Dakota. These trusts require technical expertise to set up. One party to a marriage may be more sophisticated and take charge in setting up the trust. The other party to the marriage may not understand the nuances and unknowingly waive their right to equitable distribution of property in the event the marriage dissolves.

For example a trust may be designed to give one spouse distributions which are not extended to the other spouse. The non-receiving spouse's capacity under the trust might be defined in a manner where upon the divorce of the parties the spouse may no longer be considered a beneficiary of the trust. That spouse may not be entitled to the equitable division of the marital property. If your spouse asks you to sign a trust agreement which is governed by laws outside of this state and country such as Alaska, South Dakota, Cook Islands, Bahamas, Cayman Island, Belize, Nevis and more, you should consult with a New York Divorce Attorney to make sure you do not lose rights to marital property.

Categories: Divorce
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