¶ 901
Overview
Scope of the chapter. Chapter 4 introduced the family claimants: the spouse seeking division of property (C3) and the spouse or child seeking support (C4), together with the surviving spouse and the forced heir (see supra ¶ 430). This chapter examines them in depth. It addresses how protective structures are classified in the marital estate, how divorce courts treat self-settled and third-party trusts, how premarital and marital agreements should be integrated with the plan, how support claimants reach assets that other creditors cannot, how the spouse's rights survive death, and the treatment of family claims across borders.
Why family claimants are different. Family claimants differ from every other creditor class in four ways that shape planning.
- Their claims arise from status. The marriage or birth creates the claim long before any amount is fixed, so the claimant is an existing creditor for timing purposes from that date (see supra ¶ 510.05).
- Their court has broad equitable powers. A family court divides property, sets support and enforces its orders with remedies tailored to the family, including the power to redistribute other assets to compensate for a trust it cannot reach.
- Statutes favor them. Spendthrift law, exemption law and many protective trust statutes contain exceptions for support, and some for property division (see supra ¶ 430.06).
- They know the client. A spouse knows the client's assets, habits and advisors, and often holds the documents. Concealment is seldom possible and always dangerous.
Legitimate and illegitimate objectives. The treatise distinguishes three objectives. Protecting a family's wealth from the claims of outsiders, including the future spouses of children, is a legitimate and common aim of estate planning. Arranging a couple's own affairs by agreement, so that each spouse's rights are defined in advance with full disclosure, is legitimate and encouraged by law. Defeating a spouse's or child's existing rights by transfers made during a failing marriage, or defeating a child's support, is not a legitimate planning objective, and the planner should decline it (see supra ¶¶ 150, 430.06).
How to read the chapter. Paragraph 910 addresses the classification of protective structures in the marital estate. Paragraph 920 treats self-settled trusts in divorce, and ¶ 930 third-party trusts for beneficiaries who marry. Paragraph 940 examines premarital and marital agreements. Paragraph 950 addresses support claimants, and ¶ 960 transfers in contemplation of divorce. Paragraph 970 covers rights at death, ¶ 980 cross-border family claims, and ¶ 990 the planning protocol.