How to get full custody in Maryland
Are assets in a trust protected from divorce?
Whether assets in a trust are protected from divorce in Maryland depends on the type of trust, who created it, who controls it, how it was funded, and whether trust assets remained separate during the marriage. The divorce lawyer in Howard County at Coover Law Firm, LLC reviews trust documents alongside other marital assets to help clients understand what a Court is likely to treat as marital property.
How does Maryland divide property in a divorce?
Maryland treats property acquired during the marriage as marital property regardless of whose name is on the title, and a Court generally settles the parties’ interests in it through a monetary award rather than by transferring each asset. Under Maryland Family Law Article 8-201, this excludes:
- Property owned before the marriage
- An inheritance or gift from someone other than a spouse
- Property excluded by a valid prenuptial or postnuptial agreement
- Property directly traceable to those sources
Property that meets one of these exceptions is often called separate property, and it generally stays with the spouse who owns it. The one exception is a retirement account or pension, or a jointly titled family home, which a Court can transfer directly.
Is a revocable trust protected from divorce in Maryland?
Generally, no. Among the several types of trusts recognized under Maryland law, a revocable trust offers the least protection, because its creator can still amend or revoke it, and withdraw the assets, at any time. Maryland Courts treat that control as equivalent to owning the property outright, so funds earned during the marriage may be considered marital property when determining a monetary award.
Does an irrevocable trust protect assets from divorce in Maryland?
Often, yes, when funded before the marriage or with a third-party gift or inheritance, and the benefiting spouse does not control the trustee or distributions. That combination generally keeps trust assets out of the marital estate, but the protection is not automatic, and commingling can undo it:
- Paying joint expenses from trust funds
- Depositing trust income into a joint account
- Giving one spouse broad authority to control trust assets or unrestricted access to distributions
Are retirement accounts held in a trust protected from divorce?
Maryland generally treats retirement accounts and pensions earned during the marriage as marital property, regardless of whose name is on the account. In the event of a divorce, a trust rarely owns a 401(k) or pension directly, though it can be named as a beneficiary. Dividing a qualified plan typically requires a separate Qualified Domestic Relations Order.
Can I set up my own asset protection trust in Maryland?
No. Maryland does not allow a person to fund a trust for that person’s own benefit and expect it to shield the assets from marital property claims in a later divorce or from creditors. An irrevocable trust can still protect wealth intended for someone else, such as a trust a parent creates for a child with an independent trustee, because the assets remain owned by the trust and administered by an independent trustee for the beneficiary’s benefit. A prenuptial agreement can designate property as separate before the wedding, and postnuptial agreements can do the same afterward, but two habits matter as well:
- Keep premarital assets in an account held only in your own name
- Avoid using joint funds for premarital property
Does divorce automatically remove my former spouse as a trustee or beneficiary of my trust?
Yes, for a revocable trust. Under Maryland Estates and Trusts Article 14.5-604, an absolute divorce automatically revokes any trust provision benefiting a former spouse and removes that spouse as trustee, unless the trust document or a court order says otherwise. This applies to divorces on or after October 1, 2016.
Does money I receive from a trust count as income for child support?
Yes. Maryland Family Law Article 12-201 lists trust income as a component of actual income for child support, so regular distributions may factor into a support calculation even when a court never divides the trust principal itself. Review this with your attorney alongside how child support is calculated in Maryland.
Discuss your trust and divorce questions with Coover Law Firm, LLC
A trust rarely fits neatly into a single category once a divorce begins, and whether an asset stays separate comes down to how it was funded and used. Mr. Coover has represented Howard County clients in family law matters for over 38 years, and he reviews trust and account records so a client knows what is at stake before a settlement.
Call Coover Law Firm, LLC at (410) 553-5042, or contact us online to schedule a case consultation.
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