Quiet Trusts in Divorce Part II: What happens when your spouse is a beneficiary of a quiet trust and doesn’t know about it?

By Jonathan Fields, Esq.

So, in another blog post, we learned about the quiet trust — that is, a trust in which the beneficiary is not made aware he/she has an interest.

This raises more questions and few answers.  But here they are.

What happens if your divorce is final and you later discover that your spouse is a beneficiary of a quiet trust?  Since your spouse is presumably also unaware of his/her interest, he/she can’t be accused of misrepresentation or fraud.  So, it would seem that one should be able to open up the judgment and argue, if appropriate, for either an additional property division or additional support.

What if, during the divorce, you seek a Vaughan Affidavit?  It is unclear whether the person(s) from whom you seek such information must disclose the existence of a quiet trust.  However, if you don’t do such discovery, have you waived your right to seek a further division in the event that your ex-spouse turns out to be the lucky beneficiary of a quiet trust?

Good question, but no clear answer.

Learn more about trusts and divorce here:
Inheritances, Gifts, and Trust Interests in Divorce  (by Jonathan Fields)
Revoking the Irrevocable Trust Part I (by Jonathan Fields)
Revoking the Irrevocable Trust Part II (by Jonathan Fields)