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Dividing Trusts in an Ohio Divorce

Dividing Trusts in an Ohio Divorce
February 27, 2018 LS_admin
Free Consultation with Shannon Dawes Dividing Trusts in an Ohio Divorces

Dividing Trusts in an Ohio Divorce

Couples going through a divorce in Ohio usually understand they will need to divide certain property, like houses and cars. But something people don’t always consider is how they will divide any trusts they own at the end of the marriage.

The best way to understand how trusts will be divided is to start with the basic principles of property division in Ohio.

Ohio Laws on Division of Assets

During divorce or dissolution proceedings, several states use a simple 50-50 split to divide assets between the spouses. Ohio, however, follows the law of “equitable distribution.” This means assets will be split as fairly as possible, which does not always mean right down the middle.

In carrying out an equitable division of assets, the court overseeing your divorce will only split “marital property” between the spouses. Non-marital property will remain separate and will not need to be divided during the proceedings.

According to Ohio law, marital property includes:

  1. All real and personal property that currently is owned by either or both of the spouses, including, but not limited to, the retirement benefits of the spouses, and that was acquired by either or both of the spouses during the marriage;
  2. All interest that either or both of the spouses currently has in any real or personal property, including, but not limited to, the retirement benefits of the spouses, and that was acquired by either or both of the spouses during the marriage;
  • All income and appreciation on separate property, due to the labor, monetary, or in-kind contribution of either or both of the spouses that occurred during the marriage.

Trusts might be considered non-marital property or marital property subject to division, depending on a number of factors.

Dividing Trusts in Ohio

When trying to decipher whether your trust is marital or non-marital property, consider these factors:

  1. When your interest in the trust was created (before or during the marriage)
  2. Whether the trust is revocable or irrevocable
  3. Your role with respect to the trust (trustor, trustee, beneficiary)

If you created the trust during your marriage or included provisions for your spouse in the trust, the trust will likely be a marital asset that you need to divide. The same is true if you comingled assets with your spouse in the trust. However, if you created the trust before the marriage or became a beneficiary of the trust before the marriage, the trust will likely be a non-marital asset you will not have to divide. Timing is a huge consideration, as with most property divided in an Ohio divorce.

If your trust is a marital asset, you need to consider the implications of its revocability, which can affect your ability to change the trust. Ohio law does allow a trust to be divided into two trusts in a divorce, as long as all qualified beneficiaries have been notified, and the division does not impair the rights of any beneficiary or adversely affect the purpose of the trust itself.

Trusts are a complex area of the law, and dividing them is no less complicated. You need experienced representation to help you understand your options and to protect your interests. Call Dawes Legal, LLC, at (614) 733-9999 for assistance with your trust division.