By Phil Rarick, Esq., Miami Trust Attorney
Family law attorneys are increasingly using trusts to secure and safeguard the payment of financial obligations in their marital settlement agreements. Such trusts can provide the following key benefits:
- Security that payments will be made in a timely fashion
- Assurance that the monies will be spent exactly as directed: for the child’s health, education, support – not for the other spouse’s whims and enjoyment
- Third party over-sight by neutral fiduciary on a monthly or quarterly basis
- Protection against outside creditors of the child or spouse
Of course, each trust must be tailored to the specific needs of the children or spouse. Here are a few examples of trusts commonly structured as irrevocable grantor trusts:
- Educational Trust. Purpose: secure private school tuition for minors and/or quality college/university education after high school graduation.
- Life Insurance Trust. Purpose: secure payment of life insurance premiums for child support or alimony obligations; prevent rogue spouse from changing beneficiaries.
- Safe Harbor Children Trust (Spendthrift Trust). Purpose: secure funds to provide for the health, support, maintenance and education of the children. This trust would provide the following protections: (a) child cannot “blow it” (ex: buy a new yellow Mustang upon turning 18) as the trust funds are administered by a neutral fiduciary; (b) child’s creditors cannot grab it; (c) if child marries without a prenuptial agreement the funds are protected from claims of the child’s new spouse.
- Minor’s Trust for Paternity Support. Example: Father believes mother to be a poor money manager but is ordered to pay support for the minor child. Father wants no more contact with mother. Father establishes a Minor’s Trust to fulfill his support obligations administered by a neutral fiduciary.
For more information. We publish a periodic Florida Trusts and Probate Report that flags key issues of interest to family law attorneys. Recent reports are:
- Avoiding a Marital Settlement Sand Trap: Losing Control Over Insurance Policies Solution: Irrevocable Children’s Safe Harbor Trust (Includes suggested marital settlement language)
- 7 Point Checklist for Pre-Divorce Planning
- 9 Key Benefits Available to Florida Same-Sex Couples
- The “Son-In-law Problem”: Keeping Your Wealth Safe – And Out of Reach From Your Daughter’s Husband
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For over 20 years, Rarick & Bowden Gold has been the trust firm other lawyers have turned to for help resolving their client’s estate planning, asset protection, and business matters. Since 1993, more than 500 similar law firms located outside of Florida have asked us to help their clients resolve legal issues concerning trusts, wills, and guardianship. We are frequently being asked to assist family law attorneys; we would be pleased to work with you and your firm.
For more information contact Phil Rarick at firstname.lastname@example.org or call 305-556-5209.
We welcome your comments or questions.
The information on this blog is of a general nature and is not intended to answer any individual’s legal questions. Do not rely on information presented herein to address your individual legal concerns. If you have a legal question about your individual facts and circumstances, you should consult an experienced Miami trust attorney. Your receipt of information from this website or blog does not create an attorney-client relationship and the legal privileges inherent therein.