Published in Bloomberg Tax
In an article published on December 4 in Bloomberg Tax, VF Law Counsel Patricia Clements provides strategies for protecting family assets from future divorces through properly structured trusts. She provides insight into discretionary trusts, spendthrift provisions, the need for a third-party trustee, tax efficiency vs. control, generation-skipping trust planning, and beneficiary education, to protect your family’s wealth after divorce.
“How do I make sure the assets I leave to my kids don’t end up in the hands of a future ex-spouse? It’s a practical concern—and one that becomes more urgent with every marriage, divorce, and second family in the mix,” Clements says. “Fortunately, advisers have a powerful tool: trusts. But using them correctly is where your value really shows.”
Clements emphasizes the critical balance between tax efficiency and asset protection, noting that while more distributions may lower tax burdens, they also create greater exposure if funds get co-mingled with marital assets. She recommends using HEMS standards (Health, Education, Maintenance, Support) as a baseline and layering in discretionary powers to manage both tax flow and asset protection effectively.
“Trusts aren’t just for the ultra-rich. They’re a smart, flexible way to make sure your assets benefit your children and only your children.”
Read the story in full, click here (subscriber-based).