Florida divorce courts deal with a wide range of financial issues—from joint checking accounts to multi-million-dollar business valuations. But few tools complicate the process like trusts. When one spouse uses a trust to move, control, or disguise assets during the marriage or the divorce itself, the other spouse faces an uphill battle. These structures are not always visible. They are often protected by layers of trusteeship, legal formalities, and jurisdictional distance. And yet, in a marital dissolution, the court must still determine whether the trust contains a marital interest.
Some trusts are genuine estate planning tools. Others are sophisticated instruments designed to conceal wealth. The difference can be subtle. A Tampa divorce lawyer understands that timing, funding, and control define the line between protection and deception. When a trust is used to divert assets from equitable distribution, the law offers remedies—but only if the attorney knows what to look for.
This article explains how trusts are used to shield assets in Florida divorce cases, how to identify them during discovery, what Florida law says about revocable and irrevocable trusts, and what a Tampa divorce lawyer can do to expose and recover concealed marital property.
Trusts: The Basics
A trust is a legal relationship where one party (the grantor) transfers assets to another party (the trustee) to manage for the benefit of a third party (the beneficiary). The trustee has a fiduciary duty to administer the trust according to its terms. Trusts can be revocable or irrevocable.
- Revocable trusts can be altered or terminated by the grantor at any time. These are common for estate planning and asset management.
- Irrevocable trusts cannot be changed or revoked once established, unless specific legal procedures are followed. Assets in an irrevocable trust are usually outside the reach of creditors and courts—but not always.
A trust can hold real estate, business interests, investment accounts, intellectual property, and nearly anything else of value. When used correctly, trusts serve important roles in tax planning, inheritance control, and long-term asset protection. But in divorce, they can also serve as hiding places.
Why Spouses Use Trusts to Conceal Assets
The spouse who establishes or benefits from a trust may believe that the asset is untouchable. They may argue that the trust is separate property. They may try to move marital money into the trust before or during divorce proceedings. Some trusts are set up long in advance of a divorce. Others are created as the marriage begins to fracture.
Motivations for concealment vary, but common ones include:
- Shielding family wealth from equitable distribution
- Preventing a spouse from discovering hidden business revenue
- Moving income-producing assets into the hands of a third party
- Avoiding alimony calculations based on actual financial benefit
- Creating artificial poverty for purposes of child support
When these tactics are uncovered, Florida courts do not respond kindly. But catching them requires a clear plan. A Tampa divorce lawyer looks at the entire financial picture to determine whether a trust is being used for legitimate purposes—or as a cover for fraud.
Marital vs. Non-Marital Trust Assets
Florida’s equitable distribution statute (Chapter 61) directs courts to divide only marital property. Non-marital property remains with the spouse who owns it. The challenge is classifying assets.
In the case of trusts, the key question is whether the asset inside the trust was marital. Another question is whether the trust itself was used to shield something that would otherwise be divided.
Let’s examine a few common scenarios:
1. Trust Fund Created Before the Marriage
If a spouse is the beneficiary of a trust that was created by a parent or grandparent before the marriage, that trust is generally non-marital. Distributions from the trust may be considered income for alimony, but the underlying asset is not divisible.
However, if the spouse used trust distributions to purchase marital assets, or commingled trust income with joint funds, those traceable assets may be subject to equitable distribution. A Tampa divorce lawyer will track the flow of trust money into marital property.
2. Trust Created During the Marriage With Joint Funds
This situation raises serious red flags. If a spouse creates a trust and funds it with marital earnings or joint property, then later claims the trust is off-limits, the court may find otherwise.
The judge will look at:
- The origin of the funds
- The purpose of the trust
- Whether the other spouse knew of or consented to it
- Whether the trust is revocable or irrevocable
- Whether the grantor retains control
If the trust was created to divert marital property, the court may pierce through the structure. A Tampa divorce lawyer will argue for equitable remedies when a trust functions as a shield for marital assets.
3. Revocable Living Trust Controlled by One Spouse
Revocable trusts are common tools in Florida estate planning. But they offer little real protection in divorce. If one spouse retains control, benefits from the trust, and uses trust property during the marriage, the court may treat the contents as marital.
Even if the trust is in one spouse’s name, the key question is: was the asset acquired during the marriage with marital funds? If so, the title or trust status does not defeat the marital interest.
A Tampa divorce lawyer will push the court to examine the substance of the trust relationship, not just the form.
4. Irrevocable Trust Created by a Third Party
If a third party—such as a parent—created an irrevocable trust for one spouse’s benefit, and the beneficiary spouse has no control over distributions or administration, the asset is usually not marital. It may, however, be counted as income if distributions are regular.
But if the spouse has power to appoint trustees, influence distributions, or use the trust as a personal piggy bank, the court may impute income or treat the trust as a marital asset under certain doctrines.
A Tampa divorce lawyer must analyze the trust instrument itself, as well as surrounding documents, to determine how deep the control runs.
The Doctrine of Illusory Trusts
Florida courts may disregard a trust structure if it is “illusory.” An illusory trust is one where the grantor retains effective control, even if the trust appears to be irrevocable.
This doctrine often applies when:
- The grantor names themselves as trustee
- The trust benefits only the grantor during life
- The grantor has the power to remove or replace trustees
- The grantor can determine the timing and amount of distributions
If the spouse who created the trust can take back the assets at will, the court may treat those assets as marital property.
A Tampa divorce lawyer may ask the court to pierce the trust based on its functional control structure. This requires a careful legal argument and supporting evidence.
Discovery: Uncovering Hidden Trusts
One of the biggest challenges in trust-related divorce cases is discovery. Many spouses do not volunteer information about trusts. Some claim they have no access. Others say the trust is private and cannot be disclosed.
But under Florida’s mandatory disclosure rules, all income, assets, and liabilities must be revealed. A trust, even one created by a third party, may influence alimony, asset division, or child support. That means it must be disclosed.
A Tampa divorce lawyer may pursue several strategies to uncover hidden trusts:
1. Interrogatories and Requests for Production
These written discovery tools can demand:
- All trust documents in which either party is a grantor, trustee, or beneficiary
- All correspondence with the trustee
- Bank records showing trust distributions
- Schedules of assets held by the trust
- Details of any property transferred into or out of a trust
2. Depositions of Trustees
If the spouse claims to have no knowledge or control, the attorney may depose the trustee. Under oath, the trustee must explain how the trust operates, how distributions are made, and who benefits.
3. Subpoenas to Financial Institutions
If the trust maintains accounts, the lawyer may subpoena those institutions. Bank statements often tell a story no trust document will.
4. Expert Forensic Review
Sometimes, only a forensic accountant can piece together the movement of assets. This is especially true if the trust uses shell entities, offshore accounts, or business ownership layers.
A Tampa divorce lawyer will often retain experts to trace trust assets and challenge their characterization as non-marital.
Remedies Available When a Trust Hides Assets
If the court determines that a trust was used to conceal or divert marital property, it has several remedies:
1. Equitable Distribution of the Underlying Assets
The court may disregard the trust and award the concealed asset to the other spouse as part of the marital estate.
2. Award of Unequal Distribution
If the court cannot reach the asset directly, it may give the innocent spouse a larger share of the remaining marital estate to offset the hidden trust.
3. Imputation of Income
Even if the trust remains intact, the court may impute income to the beneficiary spouse, increasing alimony or child support obligations.
4. Fraud Sanctions
If the court finds that a spouse transferred assets to a trust to defeat marital rights, it may sanction the spouse under Florida’s fraud statutes. The court can also award attorney’s fees to the other spouse.
A Tampa divorce lawyer will pursue these remedies aggressively if a trust is used to evade financial responsibility.
Can Prenuptial Agreements Protect Against Trust Games?
Sometimes. A prenuptial agreement can clarify that trusts are non-marital or specify how trust income will be treated. But the agreement must be clear, specific, and executed with full disclosure.
A Tampa divorce lawyer drafting or challenging a prenup involving trusts must ensure the agreement matches the actual trust structure. If the prenup says “Spouse A’s trust is separate,” but the trust is funded with marital assets, the prenup may not protect it.
Likewise, if the agreement attempts to waive claims to future trust distributions without adequate disclosure, the waiver may be invalid.
Prenups are useful, but they are not impenetrable shields. Trust abuse can override poorly drafted agreements.
When a Spouse Controls a Trust for Someone Else
In some cases, the spouse is not the beneficiary of the trust but the trustee. This adds another layer of complexity. A trustee has a fiduciary duty to manage assets for someone else’s benefit. But when the trustee-spouse uses trust assets for personal expenses, makes self-dealing loans, or uses the trust as an income source, the court may look at whether that role creates economic benefits that should be considered in the divorce.
A Tampa divorce lawyer will investigate trustee compensation, control mechanisms, and any personal use of trust funds when assessing how to factor the trust into divorce calculations.
FAQ
Can Florida courts divide assets inside a trust during divorce?
Yes, if the court finds that the trust contains marital property or was used to conceal marital assets, it may reach those assets through equitable remedies.
Are trusts always protected from divorce in Florida?
No. It depends on who created the trust, what it holds, how it’s structured, and whether it was funded with marital funds.
Can a spouse hide money in a trust during a divorce?
They may try. But a Tampa divorce lawyer can use discovery tools, depositions, and forensic accounting to uncover these attempts and ask the court for appropriate sanctions or redistribution.
Do revocable trusts protect assets in divorce?
Not effectively. If a spouse controls a revocable trust and uses it as a personal asset, the court may treat it as part of the marital estate.
What happens if my spouse is the beneficiary of a trust?
That depends. If the spouse has control or receives regular distributions, the court may impute income or consider the benefit in alimony or support calculations.
Can a trust be dissolved by the court in a divorce?
Not usually. But the court can reach assets within the trust or assign offsetting assets to the other spouse to ensure fairness.
Should I create a trust to protect my assets before marriage?
Possibly. But timing, structure, and intent matter. A Tampa divorce lawyer can help you structure the trust correctly and advise whether a prenuptial agreement is also needed.
What if the trust is based in another state or offshore?
Jurisdiction matters, but if the trust affects a Florida spouse, Florida courts may assert authority over the marital interest.
Can a spouse be penalized for creating a trust during the divorce?
Yes. Transfers made to defeat marital rights can be set aside, and the court may award attorney’s fees or enter sanctions.
When should I talk to a Tampa divorce lawyer about trusts?
Immediately. If there’s any indication that a trust may be involved in your divorce, early action is essential to preserve rights and trace assets before they disappear.
The McKinney Law Group: Fair, Forward-Thinking Prenups for Tampa Couples
Prenuptial agreements help you enter marriage with transparency and trust. We draft fair, enforceable agreements that help Tampa clients protect assets and avoid future disputes.
Call 813-428-3400 or email [email protected] to schedule your private consultation.