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Living Trust: Can my 2nd wife get access to assets in it during divorce

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Hello.
I set up a trust with my first wife that has my home, business, and a few other assets in it.
My first wife unfortunately passed away and I remarried my 2nd wife.  I did not change anything in the living trust since then.
It's been now over 10 years since I've been married to my 2nd wife.  We are now headed to divorce.
She is threatening to sue to take my home now.
Do you know if she can go after the assets in the living trust?
Thank you.

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Smells like troll.

Crazytree (May. 29, 2017 @ 2:22a) |

Way to pile on a guy while he's down.  I like to think I have good judgement but I sucked in debate club so I hire the b... (more)

kriskos4 (May. 29, 2017 @ 8:08a) |

She is well versed in divorce and has been setting you up for a few years. Like others have mentioned, she probably hasn... (more)

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latrading said:   Do you know if she can go after the assets in the living trust?
  
Depends. Over 10 years, things can start to look like community property if you didn't do everything exactly right and save proof.

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Thank you for your advice. 

What type of proof do I need? 
I haven't done anything with the assets in the trust and have kept it as is.  I'm also in California. 

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Depends what it is.  For example:  A house with a mortgage can start to look like community property when you've been making payments using your combined income.  Now, if you inherited all your assets plus an appropriate amount of cash, and kept great records that it was paid for, and the maintain and taxes were paid from your inherited cash stash, then yeah, it might be protected.

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First off, anything owned prior to marriage is yours. For the home, the only thing to scum could take would be the appreciated value. Second, if the assets were commingle, then it's marital property. Third, of the living trust is irrevocable, you're fine with everything. If it is revocable, it offers no legal protection. Forth, if there is no pre-nup, then you are in trouble. Fifth, if you're in a community prop. state (which you are), no bueno either unless you have a pre-nup or trust. Six, seek advice of a GOOD LAWYER. Check out martindale.com as well as avvo.com. It's going to cost $$$ in legal fees and assets unless you have a pre-nup and/or irrevocable trust.

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Thanks for your advice Chyvan and Greatness. I can't believe how naïve I was to marry this terrible woman who is now trying to steal assets from my child.

I was looking at the trust document and it doesn't state whether it's irrevocable or revocable. Do you know how to find that info on a trust document?

Here's more about my situation:

I have one teenage physically handicapped daughter.

My house was under the trust but I changed the title to under me as "single" after my first wife passed away.

I made income since we were married and it was put into a joint bank account.

My 2nd wife has 2 adult boys and a house she had prior to the marriage. Her property is rental and she made no income during our marriage, so she contributed nothing to my mortgage.

I made 100K per year, but she took most of it and my allowance was only a couple hundred per month.

Now she's asking for 1/2 of my assets after all this.

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First off, IANAL. I STRONGLY recommend you hire the best one you can afford. It would have an irrevocability clause in it. Never marry period. However, if you must, never without a pre-nup and/or an irrevocable trust. You should try a mediator first. You will save thousands on legal fees an possibly be able to work things out. If not, your lawyer should be able to have the Judge enforce that the child's needs are met first. Since you have the child custody, that will work in your favor. Since you have a house and she has a house, you'll prob. be able to walk away with each of your own properties in tack. You may be screwed on your retirement, medical, spousal support (if she doesn't have a job), and SS. If you had one account where all the money goes into and not your own commingled account, then it is all marital property. Most importantly, get your docs in order. She may had made not money from her rental, but if it went up in value, you are entitled to part of the appreciation. Likewise, if you house went up in value, than your wonderful wife is entitled to part of the appreciation. Chances are, it will be a wash with the real estate.

Why is your wife have control of your salary? You are BOTH supposed to be able to have access and make joint decisions. You need to stop that crap RIGHT NOW! Open up a new personal account and have all of your income deposited into that account. You then can divvy up the money from your account for joint bills at your discretion, not hers. If you have any savings accounts, take HALF of said monies and place them into a new account with only your name.

You need to man up and lawyer up ASAP.  Should you chose to marry again, PRE-NUP & TRUST or no financial nookie for your new wife.

Also, make sure you delete your browser history on your phone, tablet, and PC/Mac in case she goes through your stuff.  

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There is no doubt - you have to lawyer up.

As she's not working, and you were married over 10 years in CA, I believe you're looking at spousal support until death or her remarriage also. Hopefully your own expenses for your daughter are considered when determining the spousal support that the court determines you can afford. There's too many moving parts and too much at risk for you to cheap out on a lawyer.

A good divorce attorney is probably worth their weight in gold.

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misterkrantz said:   I was looking at the trust document and it doesn't state whether it's irrevocable or revocable. Do you know how to find that info on a trust document?

I'm not sure if it just outright says, but think about your intent. Did you write it so that it could be changed as circumstances changed throughout the years, or did you write it so that it's a done deal? If you have another child, can you add that child, or is he or she excluded?
misterkrantz said:   My house was under the trust but I changed the title to under me as "single" after my first wife passed away.

This really sounds like it was revocable because you removed an asset. In an irrevocable, once the asset is there, it's not coming out. However, now that the house is out of the trust, it kind of doesn't matter anymore. You can have a trust that's not funded and will be of no value. This also contradicts your first post where you said the house was in the trust.
misterkrantz said:   I made income since we were married and it was put into a joint bank account.

Joint account doesn't mean anything. The fact that you earned money while married means that she has a stake in your earnings. The same that you do with hers.
misterkrantz said:   My 2nd wife has 2 adult boys and a house she had prior to the marriage. Her property is rental and she made no income during our marriage, so she contributed nothing to my mortgage.

She had RENTAL income. You really need someone else helping you. You don't grasp these concepts. Wouldn't matter if she made a million dollars and blew it all on makeup and had nothing in savings, she's still entitled to half of your savings accumulated during the marriage and vice versa with her make up. Also, because you were using community resources to pay your mortgage, as much as you don't like it, she was acquiring equity in your house with each mortgage payment. You needed to own the house free and clear, and even then, taxes and maintenance expenses would have given her a small share, and the corresponding increase because of appreciation. However, after 10 years, can you PROVE just what portion is hers vs yours, and when you can't do that, it's presumed to be community property.
misterkrantz said:   I made 100K per year, but she took most of it and my allowance was only a couple hundred per month.

You made a mistake. In a community property state or maybe any state, you want to marry UP. That way when it ends, you don't care because you walk away with more than you put in. Unless you marry an equal, there's always going to be a loser in the divorce.
misterkrantz said:   Now she's asking for 1/2 of my assets after all this.

That's her right, and unless you kept good records, you'll have a tough time keeping them from her, but you're able to try to do the same to her rental, but there's a good chance the rental income paid the expenses on the rental and it would look like she didn't use community resources to maintain her sole and separate property.

In it's simplest terms, if you get married and have $100, that's yours when the marriage ends (unless it gets converted to community property which happens quite a bit), but if you accumulated $100,000 by the time the marriage ends, the other spouse gets (100,000-100)/2 regardless that you earned all the income.
  

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IANAL

Nearly by definition, a living trust is a revocable trust. The trust documents won't say "revocable" or "irrevocable". Look through the documents to see who the Trustee is. In a living trust, you are the Grantor and the Trustee as well, until your death in which you designate someone else to be a Trustee. Another way to look at how your accountant is handling taxes. The gains of assets in living trust is filed under your SSN for taxes, whereas an irrevocable trust typically requires its own TIN and a separate tax filing.

The reason this is important is because if you indeed having a living trust that holds asset, it offers no asset protection. That is because as the Trustee is you, so you can reverse anything in the trust.

Since you are in a community property state, and have been married over 10 years... I hate to say it but I think you're hosed. Your 2nd wife gets half of everything you own and you may have alimony payments if she doesn't make any money. I personally don't think it matters that you wife never made any payments to your mortgage. I would consult a lawyer as soon as possible.

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misterkrantz said:   Do you know if she can go after the assets in the living trust?

 

Of course she can.  She can "go after" whatever she wants.  And after this period of time and the events that have transpired, just about anything could happen if you don't offer a vigorous defense (and a pretty good offense at that).

Get yourself a good attorney NOW.    

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I'll reiterate...lawyer up right now.  Freeze your credit right now, cancel joint cards before she rings up a bunch of new debt.  You'll be tempted to squirrel away a bunch of money, don't.  This one sounds crafty and her lawyer will find it.

Somebody said because she has a house, that means you'll get to keep your house.  I don't think so, I think she'll be entitled to half of your house....you'll probably need to buy her out or sell.  Good luck.

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Make sure to try to get half of her house too.

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Lawyer up.  Hopefully one of them involved will be the one who originally executed your trust.  Protect yourself and your child, don't play around or wait for things to happen to you.

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Obligatory IANAL.  Hire a lawyer licensed in CA, as everyone said.  When questioning them before hiring, ask not just about their divorce experience but also about their experience with trusts in divorces, and trusts holding businesses.  That's what makes your scenario a little more complicated, of course. 
 
You probably have a trust that is revocable at this point, but ask the lawyer.  Sometimes there is one living trust for a married couple, which becomes irrevocable after the last spouse dies, but the business may complicate that.  Make sure you have the original trust document, including the addenda made after your first wife died.  Such a trust often comes with a rudimentary "pour-over" will for each Grantor.  Find these also.  This is the only trust, right?  Neither the 1st nor the 2nd wife had a separate trust?
 
Do all the stuff suggested about freezing accounts. etc.  One thing not yet mentioned is - if you have any 401K, 403B (from present or past work), any IRAs, non-qualified deferred annuities, life insurance policies, etc., immediately check them to see who the designated beneficiary is.  You may be surprised if - probably when - your lawyer tells you that in many cases, what's on these forms trumps what's in your trust or will.  Many people have been.

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If any of it an be considered community property, absolutely yes she can.

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scrouds said:   Make sure to try to get half of her house too.
  
I agree, but the difference is that she had the house before the marriage.  OP bought the house with his wife (I think?).

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kriskos4 said:   the difference is that she had the house before the marriage.  OP bought the house with his wife (I think?).

Here's the distinctions.

The NEW wife had her house rented, and could therefore have used non community property money to support the house.

The house of the OP was purchased with his 1st wife, but he made house payments for 10 years during the marriage with the 2nd wife using community property resources.

The 2nd wife stands a decent chance of keeping her house, but the OP is at risk of losing a good percentage of his house.

  

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> I made 100K per year, but she took most of it and my allowance was only a couple hundred per month.

Definitely get a lawyer - just this sentence tells me that you are not capable of making good judgement on your own.

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Chyvan said:   kriskos4 said:   the difference is that she had the house before the marriage.  OP bought the house with his wife (I think?).

Here's the distinctions.

The NEW wife had her house rented, and could therefore have used non community property money to support the house.

The house of the OP was purchased with his 1st wife, but he made house payments for 10 years during the marriage with the 2nd wife using community property resources.

The 2nd wife stands a decent chance of keeping her house, but the OP is at risk of losing a good percentage of his house.

  


Yup. She used her money so it's her house. He used his money so it's also her house.

Either way this isn't a diy kind of thing. A good lawyer will. Make a play for the other house if they can.

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Smells like troll.

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PrincipalMember said:   > I made 100K per year, but she took most of it and my allowance was only a couple hundred per month.

Definitely get a lawyer - just this sentence tells me that you are not capable of making good judgement on your own.

  
Way to pile on a guy while he's down.  I like to think I have good judgement but I sucked in debate club so I hire the best lawyer I can find.

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She is well versed in divorce and has been setting you up for a few years. Like others have mentioned, she probably hasn't co-mingled her rental funds keep those separate intentionally. For reasons like this, I am failing to see the benefits of getting remarried. Definitely, marry up like someone else suggested.

Just a guess... Sex was super hot when dating? and dwindled shortly after getting married? While your waiting look up Tom Leykis, he has daily talks on these types of women.

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