In California, property owned by a spouse before he or she is married is considered separate property and is not divided between spouses at the time of divorce. Trusts established before marriage are considered separate property. Using a trust is one way to manage assets, protect a small business, manage monetary gifts and protect money from creditors.
Other trusts including asset protection trusts also protect assets in the event of a divorce. Though no one expects a marriage to end in divorce, people with considerable assets or business interests should have a strategy to protect their interests if a divorce occurs. Establishing a trust for a small business can protect your assets in the event of a divorce.
Business owners who are engaged to be married should consider drafting an Asset Protection Trust, transferring the ownership of the business and other separate property from the business owner to the trust. If the marriage ends in divorce, the court does not reach the assets in the trust because the spouse does not own the assets. Asset Protection Trusts are good options for owners of C-Corporations, Limited Partnerships and Limited Liability Companies.
If you own a small business or are the beneficiary of a revocable or irrevocable trust or would like to set up a trust to protect your assets, contact our firm today. We make sure you understand your options and take into account all possible considerations.
At First Class Counsel, we assist business owners in drafting and structuring their trusts to ensure their assets will remain in the right hands.