Developments in the Treatment of Trusts in Divorce

In this month’s webinar, “Development in the Treatment of Trusts in Divorce,” Tom and his co-presenter examined the evolving legal landscape surrounding irrevocable trusts in marital dissolution. The program outlined the general legal principles that govern irrevocable trusts in divorce and analyzed how those rules influence equitable distribution and alimony determinations. Drawing on recent case law, they highlighted a growing trend among certain state courts to characterize trust interests as property subject to division, and discussed the practical implications of that shift for settlors, beneficiaries, and fiduciaries. The session also offered concrete guidance for drafting and administering irrevocable trusts to mitigate the risk of inclusion in divorce settlements, from structural design choices to ongoing fiduciary practices. They also addressed the impact of the 2017 Tax Cuts and Jobs Act on the taxation of irrevocable trusts benefiting an ex‑spouse and outlined estate planning approaches to navigate these changes effectively.

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