Have you ever wondered if you could make sure your children inherit your assets, but that their spouses do not get access to it?
If you have thought about this, you are not alone. In the United States, statistics indicate nearly 50% of marriages end in divorce. When they do, division of assets is mandated by the court to accomplish what the court considers fair and “equitable.”
If your child inherits from you outright and free of trust, then, if they commingle funds, they could lose assets to a spouse (your in-law) in a divorce. Your child could lose what you leave to them in a lawsuit, and they could direct it to their spouse when they pass and NOT to your grandchildren.
Most people love their in-laws. However, statistically, half the time their married child will become divorced. If that happens, your in-law could possibly get half of what you left your child free of trust. Fortunately, with planning, you can make sure that will not happen.
Let’s say Brian and Bridget have a grown son, Samuel, who is married to Cindy. Now, Brian and Bridget like Cindy, but they also think that Cindy may seek a divorce in the future.
If Brian and Bridget wish to ensure that Samuel’s inheritance will not be lost to Cindy in a divorce, they can direct Samuel’s inheritance be left to him in trust. Samuel can be the legal owner (trustee) and the beneficial owner (the beneficiary). Samuel can be in charge of the money and have total use and access to it for all of his needs to maintain his accustomed manner of living.
The trust can direct that upon Samuel’s passing, the assets go to Samuel’s children, not to Cindy. In effect, Brian and Bridget can make sure that Cindy will not get any of their assets if their child gets divorced, and they can ensure that the money will stay in the family bloodline.
Is doing this like creating a built-in prenuptial agreement for your child’s inheritance? Yes. Do many people want to do this? Yes. Does this protect your assets? Yes. Does it make sure assets stay in your family? Yes.
In a world filled with uncertainty, making sure your assets will stay in your family bloodline is a comfort to many. Fortunately, proper use of the law and a little bit of pre-planning can make sure your assets will be protected from most lawsuits, and will stay in your blood family.
Mark F. Winn, J.D., Master of Laws (LL.M.) in estate planning, is a local asset protection, estate and elder law planning attorney. mwinnesq.com