Irrevocable Trust over Prenup?

[ChiGuy1215]

Hello all,

So I was wondering if anyone had ever thrown assets (mutual funds etc) into an irrevocable trust prior to getting married.

Is this money protected in the case of a divorce?

Can the trust be terminated at age 65 and then one can become the beneficiary then?

[pulmdoc]

Short answer: no, an irrevocable trust is just that. It's irrevocable and you can no longer control the assets. Yes it would be protected in case of divorce because they are no longer your assets, but the trustee of the trust is the one who controls them. If you are worried about asset protection before marriage, get a prenup.

[conniebird]

Also check state laws....a lot of states will consider pre-marital assets....pre-marital. But those should go in a pre-nup.

[jfoxcpacfp]

ChiGuy1215 wrote:

Hello all,

So I was wondering if anyone had ever thrown assets (mutual funds etc) into an irrevocable trust prior to getting married.

Is this money protected in the case of a divorce?

Can the trust be terminated at age 65 and then one can become the beneficiary then?

Click to expand...

"Throwing assets" into an irrevocable trust is not to be considered lightly. Costly to set up, costly to manage (annual tax filing, for example) and can be a PITA to deal with if your trustee resigns or events change in your life so that you would like to change your mind.

There was a good comment on a post on PoF as a way to start the convo for a prenup, something like, "Let's sit down right now, while we're friends, and discuss what we'll do if this whole thing blows up in our faces."

[ChiGuy1215]

Thanks for the input, but I'm looking for a solid alternative to prenups. I live in Illinois. I don't how much separate assets are truly protected here.

[Craigy]

You really need to consult an estate planning attorney in your area.

Your question is necessarily a very convoluted one for a variety of reasons, including but not limited to: the specific language of your trust, who can or can't be the trustee, what trust provisions are legal in your state, and most of all, community & separate property laws in your state (and whatever states you might move to, etc).

The goal obviously is to protect your assets without having to get your fiancee to sign a prenup.  If this were something that was easy to do, people would be doing that and not going through the trouble of signing a prenup.  

You're probably going to need the prenuptial agreement.  An unwilling fiancee should give you pause.  However, that does not mean that the document should be one-sided.

Good luck!