When parents go through a divorce, many important questions come up about money, property, and the future. One question that often catches people off guard is what happens to a trust set up for their children. Whether a trust already exists or you're thinking about creating one, a divorce can make things more complicated. Understanding how trusts work and who controls them can help you make better decisions for your children's future.
If you're facing a divorce and have concerns about a trust or your children's financial future, don't wait — reach out to us today through our online contact form or call (614) 665-5833 to speak with someone who can help.
What Is a Trust?
A trust is a legal arrangement where one person (called the "trustee") holds and manages money or property for the benefit of someone else (called the "beneficiary"). In a children's trust, the beneficiaries are the children. The trustee is responsible for making sure the money is used the right way — often for things like education, health care, or basic living needs.
Trusts are set up through a legal document that spells out the rules. Those rules explain how the money can be used, when the child can access it, and who is in charge of managing it.
How Does Divorce Affect a Child's Trust?
A divorce doesn't automatically change the rules of an existing trust. However, it can raise new questions about who is acting as the trustee and whether that person is still the right choice. If both parents were originally named as co-trustees — meaning they shared the role of managing the trust together — a divorce can make that situation tense or unworkable.
In some cases, one parent may ask the court to step in and make changes. Courts do have the power to review trust arrangements when the well-being of a child is involved.
Who Can Serve as Trustee During a Divorce?
The trustee is the person who makes the financial decisions for the trust. During a divorce, this role becomes very important. If one parent is the sole trustee, they keep that role unless a court decides otherwise. If both parents are co-trustees, they may need to work together despite their differences — or ask the court to appoint a neutral third party.
A neutral third party, sometimes called an independent trustee, is someone with no personal stake in the divorce. This could be a trusted family friend, a bank, or a professional fiduciary (someone paid to manage money on behalf of others). Having an independent trustee can help reduce conflict and keep things fair for the children.
Can a Divorce Settlement Change the Terms of a Trust?
This depends on who created the trust and what type of trust it is. Here are a few common scenarios:
- If the trust was created by a grandparent or another third party, the divorce settlement generally cannot change its terms. The person who created the trust set the rules, and those rules are usually locked in.
- If the trust was created as part of a divorce agreement itself, the court has more power to modify it, especially if circumstances change in a significant way.
- If the trust was created by one or both spouses during the marriage, the divorce court may have some authority over how it is handled, depending on Ohio law.
It's worth noting that Ohio courts focus heavily on what is in the best interest of the child. If a trust arrangement is no longer serving that goal, a court may be willing to revisit it.
Revocable vs. Irrevocable Trusts: Why It Matters in a Divorce
There are two main types of trusts: revocable and irrevocable. Understanding the difference is key when going through a divorce.
A revocable trust can be changed or canceled by the person who created it. During a divorce, this type of trust may be subject to more scrutiny because it can be altered. If one spouse created a revocable trust, the other spouse may argue it should be treated as a marital asset — meaning it could be divided during the divorce.
An irrevocable trust, on the other hand, generally cannot be changed once it's set up. Assets in an irrevocable trust are usually protected from being split in a divorce because they are no longer considered the personal property of either spouse. However, if the trust was funded with marital money — money earned or saved during the marriage — a court may look at it more carefully.
Common Concerns Parents Have About Children's Trusts and Divorce
It's natural to have a lot of questions when you're going through a divorce and trying to protect your kids. Here are some of the concerns parents most often raise:
- Will my ex-spouse gain control over the trust money? This depends on the type of trust and who is named as trustee. Having a clearly written trust document and the right trustee in place can help protect the funds.
- Can my ex-spouse use trust money for themselves? If the trust is properly set up, the trustee is legally required to use the funds only for the named beneficiaries — the children. Misusing trust funds can lead to legal consequences.
- What if I don't trust my ex-spouse to manage the money fairly? You can ask the court to remove them as a trustee and appoint someone neutral to take their place.
- Can we set up a new trust as part of the divorce? Yes. A new trust can be created as part of a divorce agreement to provide ongoing financial support for children. A Columbus divorce attorney can help you draft one that protects your children's interests.
These are valid concerns, and raising them early with an attorney can help you avoid problems down the road. Getting the right legal guidance before or during the divorce process can make a meaningful difference for your family's financial future.
Steps to Protect a Child's Trust During a Divorce
Taking action early is one of the most helpful things you can do. The following steps can help protect a child's trust during and after a divorce:
- Review the existing trust document with an attorney to understand what the current rules say and who has control.
- Identify whether the trust is revocable or irrevocable, since this will affect how it is treated during divorce proceedings.
- Consider appointing an independent trustee if both parents are currently co-trustees and the divorce is creating conflict.
- Keep detailed records of all trust transactions, including deposits, withdrawals, and what the money was used for.
- Ask your attorney whether any changes to the trust need to be made to better protect your children's interests going forward.
Taking these steps early can help prevent disputes and give you peace of mind that your children's financial future is secure, regardless of what happens between you and your spouse.
What Ohio Law Says About Trusts and Divorce
Ohio has specific laws that govern how assets are divided during a divorce. Generally, courts divide "marital property" — things acquired during the marriage — and leave "separate property" — things owned before the marriage or received as gifts or inheritance — with the original owner.
If a child's trust holds separate property, it is more likely to be left alone during a divorce. If it holds marital property, the court may look at it more closely. Ohio courts will always put the children's best interests first, which means a judge may step in if the current trust arrangement isn't working for the children.
Talk to a Columbus Divorce Attorney About Your Children's Trust
Protecting your children during a divorce goes beyond deciding custody and visitation. Their financial well-being matters just as much, and a trust is one of the most important tools for securing that future. Whether you need help understanding an existing trust, changing who manages it, or creating a new one, the guidance of a knowledgeable Columbus divorce attorney can help you move forward with confidence.
At Kemp, Schaeffer & Rowe, we understand how much is at stake when families go through a divorce. We take the time to listen, explain your options in plain language, and help you make decisions that protect what matters most — your children. If you have questions about a children's trust or any aspect of your divorce, contact us today through our online contact form or call (614) 665-5833 to schedule a consultation.