Many of our clients want to plan for their children’s future, when drafting their estate plans. However, some of our clients are concerned about their child’s spouse accessing the inheritance.
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While each client has different concerns and requires tailored estate planning, one question we often hear relates to protecting the inheritance of the spouse of their child.
So can inheritance be protected from a spouse of your child?
Yes, there are many ways to try to protect inheritance.
While every situation is different, there are steps that can be taken to try to keep the money for your child – and not their spouse.
One way to attempt to protect the money is to instruct the child as to how to handle inheritance of money upon receipt.
Tell your child to hold on to any documentation that specifies that the inheritance is for the child, and not to the child and their spouse. Keeping the inheritance in a separate account can insulate it further.
One of the best ways to protect inheritance is by putting a language in your trust that specifies how it is to be distributed.
An incredibly useful tool in protecting inheritance is a trust for your child, inside your trust. This is often referred to as a sub-trust.
If you put your child’s money into a sub-trust within your trust, you can stagger their distribution and put language in place about how they can access their inheritance.
If you stagger their distribution so that they receive chunks at certain ages, if they get divorced, hopefully they will still have the remaining distributions following their divorce.
Prior to a distribution set, you can provide guidance to the trustee so that they know when they can give money to your child for a variety of purposes.
Tailored language in your trust is one of the best ways to potentially protect the inheritance of money, especially if divorce is on the horizon.
Utilizing a trust, as opposed to a will or dying interest, also keeps the terms private. If your child is estranged from their spouse, they might not even be aware of the trust and distribution.
If your child is not yet married, consult an attorney about a pre-nuptial agreement when the time comes. This agreement can plan for future inheritance.
We help our clients put the correct estate planning documents in place to address their concerns and protect their wishes. We also help clients routinely update their documents as situations change.
Let us know if you have questions as to what type of estate plan is right for you or your loved ones or if you need help tailoring language to protect your child’s inheritance.
Contact us today to help you get the right documents in place or to update your current estate plan. We will plan so that you don’t have to worry about your future.
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