Who created the trust and with what
A trust funded by a parent or grandparent for one spouse is often treated as that spouse's separate property in New York, much like a gift or inheritance. That can change when distributions are deposited into joint accounts, used to buy a home in both names, or otherwise mixed with marital funds, and tracing becomes the issue. A revocable trust the couple created during the marriage with marital earnings usually stays marital in substance, while an irrevocable trust for children or others raises harder questions. Transfers into trusts made as the marriage was breaking down tend to draw closer scrutiny. The trust instrument and the funding history are the starting point for each of these questions.
Trust income and support
Even when the trust itself is separate property, distributions a spouse regularly receives can be counted as income for maintenance or child support. Discretionary trusts, where a trustee decides whether to pay anything, are harder to evaluate, and courts may look at the history of distributions rather than only at what the trust document permits. A divorce court usually cannot order a third-party trustee to make distributions, but the pattern of past payments can still affect the support picture. Trustees and family members are not parties to the case, so records may need to come through a subpoena, and confidentiality concerns are common. Ask for the trust agreement, account statements, and records of distributions made during the marriage.
Accounts held for the children
Custodial accounts and college savings plans opened for children raise different questions, because the child may be the legal owner or the intended beneficiary rather than either spouse. Divorcing parents often agree on who will control those accounts and how the money will be used, and the agreement should say so clearly. We would start by sorting each trust fund or account into the right category, list the documents we need, and decide whether a tracing or valuation analysis is worth the cost. If you are a beneficiary, we also consider how trust information can be shared with the court while respecting confidentiality the trustee may require. Bring whatever trust papers you have, even if they seem incomplete.
