Oftentimes, when the beneficiary of a trust is getting married, their family wonders whether the beneficiary needs a prenuptial agreement (a “prenup”) to protect family money held in a trust. Perhaps the beneficiary does not have significant assets of their own, but the family wants to ensure that the trust will be protected in the event of a divorce. Is the trust alone enough protection? This is a commonly debated issue amongst matrimonial and trust and estates practitioners.

In New York, a beneficial interest in trust is generally not considered “property” in a divorce proceeding. If a trust is not funded with marital property, is irrevocable, and neither party is a trustee, the trust assets are typically deemed “unavailable to either party,” and not subject to distribution in a divorce (Markowitz v. Markowitz, 146 A.D.3d 872, 873–74 (2017)). The premise is that where a beneficiary has no control or right to access the trust assets, the beneficiary’s interest in the trust is neither marital nor separate property.

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