Ann Arbor, MI asked in Divorce, Estate Planning, Family Law and Tax Law for Michigan

Q: Can wife and I establish a family trust as co-trustees regarding properties that can withstand an uncontested divorce?

3 Lawyer Answers
Kenneth V Zichi
Kenneth V Zichi
Answered
  • Estate Planning Lawyer
  • Fowlerville, MI
  • Licensed in Michigan

A: It is unclear what you are trying to accomplish.

A divorce will ALWAYS impact jointly owned property, and the fact it is placed in a 'trust' for some estate planning or administrative purpose doesn't mean a divorce court shouldn't or couldn't 'delve into' the ownership of that property.

BUT if it is 'uncontested' and the two parties WANT to continue to own the property with the trust, I can't see a court stepping in and trying to undo that kind of an agreement no matter HOW it is organized or established.

Seek local legal advice on establishing a trust (which is NOT something 'everyone should have' despite what the one trick ponies suggest!) and whether or not that or some other mechanism makes more sense.

-- This answer is offered for informational purposes only and does not constitute legal advice or create an attorney/client relationship.

I am licensed to practice in Michigan only. Please seek competent local legal help if you feel you need legal advice

Brent T. Geers agrees with this answer

Nina Whitehurst
PREMIUM
Nina Whitehurst
Answered
  • Estate Planning Lawyer
  • Crossville, TN

A: If you create and fund an irrevocable trust wherein you two essentially give up all rights to withdraw principal and income, and then divorce later, that property in the trust would not be considered marital or separate property; it would not be "your" property at all, and therefore it would "withstand" a subsequent divorce.

If you create and fund a revocable trust, then the property in the trust will need to be divided in a subsequent divorce.

The creation and funding of trusts are not do-it-yourself projects. You should consult with an experienced estate planning attorney to update your estate plan, and if divorce is contemplated then be sure to tell him or her that because that will change the conversation. You might need to each hire separate counsel.

Brent T. Geers
Brent T. Geers
Answered
  • Estate Planning Lawyer
  • Grand Rapids, MI
  • Licensed in Michigan

A: To add a slightly different "out of the box" perspective: if a married couple, who now both want to be divorced, want to continuing owning property together, why not either 1) set up an LLC to own the properties, or 2) own them as tenants in common? Seems a lot more streamlined than setting up a trust.

As someone else mentioned, the benefit of an uncontested divorce is that judges like agreements; two people can agree to do pretty much whatever they want.

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