Understanding Hidden Assets, Trusts, and LLCs in Divorce Battles
The Wall Street Journal (Candace Taylor) 09.24.24, published the article “Secret Trusts, a Bitter Divorce and the Battle Over One of America’s Biggest Homes.” The article is regarding the Pritzker estate, a 50,000-square-foot property in the hills above Los Angeles (one of the largest private homes in the country). It is at the center of the divorce of billionaire Tony Pritzker and his philanthropist wife, Jeanne Pritzker. Following their separation, Jeanne sought to keep the estate for philanthropic events until Tony’s lawyers revealed that a network of trusts and LLCs owned it, not the couple. Jeanne wasn’t a beneficiary of the trust. Therefore, she wasn’t entitled to live there, and the property wasn’t part of the marital estate subject to equal division.
Complicated Asset Division During Divorce
The Pritzkers reached a preliminary settlement in April 2024, and Jeanne moved out shortly after that. As of the date of this article, prominent L.A. brokers are being considered for its sale. Jeanne’s situation reflects a trend in which the wealthy use trusts and LLCs to protect assets and privacy. However, spouses have now been using trusts and LLCs as a means to shield high-end real estate during marital splits. In several other high-profile divorces, spouses have accused their partners of hiding assets in secret trusts and LLCs to avoid dividing those assets during divorce. If it’s demonstrated that a trust was established for fraudulent purposes, such as intentional concealment, it typically won’t stand up in divorce court.
Building Trusts and LLCs with Integrity for Lasting Asset Protection
At Law Stein Anderson, we understand that trusts and LLCs are potent tools for asset protection and estate planning. However, forming these entities transparently and for legitimate purposes is crucial. Trusts established fraudulently can be dismantled in court, leaving assets unprotected. Proper structuring, careful planning, and adherence to legal standards ensure these mechanisms achieve their intended purpose.