Equal Division of Property
An equal division of marital property, as opposed to a strict transfer from one spouse to the other, might provide greater lawsuit protection and might also allow each spouse to sleep more easily. Marital property can be divided according to a written agreement which states that each spouse is to hold one-half of all marital property as their own separate property. This is where a revocable trust may become particularly useful for our purposes. Once the marital property is divided, two separate revocable trusts can be established, one for each spouse. The husband’s trust then holds title to his one-half of the property, and the wife’s trust holds title to her one-half interest.
When marital property is divided in this manner, a number of our previous concerns are eliminated. First, when property is held pursuant to a written trust agreement, it is unlikely that a court would imply the existence of some other type of trust arrangement that is not consistent with the terms of the written trust. It is unlikely that a court would allow a creditor of the husband to reach into and claim the property held in the wife’s revocable trust on the theory that she is holding that property for the benefit of her husband. As a result, property held by the wife in her trust would be immune to potential claims from the husband’s creditors. Although the property in the husband’s trust would still be available for these creditors’ claims, at least one-half of the total estate has been removed from the reach of the husband’s creditors. Admittedly this is only a partial solution to the problem, but it is a useful beginning.
This arrangement also minimizes concerns about losing management and control over one’s assets. The husband would still have full management and control over the assets in his revocable trust and, in the event of a divorce, each spouse is likely to have no more property than they would otherwise be entitled to.