Safeguarding Your Child's Inheritance
No matter how old your children are, they are always your "babies" and you want to protect them. Your estate plan should grow with your children and help your adult children manage money. When planning your estate, you should consider the possibility that your child might have a future divorce. Inherited assets can become marital property. Even if you like your son or daughter-in-law, you may not want him or her to end up with your child's inheritance in the event of a divorce. You may also worry that after you are gone, your child could die first, leaving your son or daughter-in-law to inherit everything you left to your child.
If your son or daughter-in-law remarries, all your assets and family heirlooms could end up with someone you don't even know - leaving your grandchildren out in the cold! Most of us want to keep property in our own family line. Is there anything that can be done to prevent the possibility of your property from ending up with strangers?
Inheritance Protection in a Divorce
Yes, with the proper estate planning, you can create a trust, either in your will (testamentary trust) or a stand-alone living trust, that will continue after your death and distribute your hard-earned property only to your descendants. This type of trust is esometimes called an inheritance or bloodline trust. An inheritance trust gives your children the benefit of your assets, such as access to income and principal to pay for things like funding a business, paying for college, and even paying for your grandchildren's education while also protecting those assets from others.
You control when the money is distributed and what it is used for. An inheritance trust reduces the risk that your property could end up as part of a divorce settlement or as a windfall to your son or daughter-in-law's second spouse.
Inheritance Protection from Creditors
An inheritance trust can also protect your children from themselves by safeguarding their inheritance from their creditors - and even from their own bad behaviors, such as bad money management skills or addiction problems.
For more information on keeping your child's inheritance in the family, call us at 704-887-5242 or fill out the form below to schedule a private consultation in our Ballantyne office.
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DISCLAIMER: This is an advertisement and contains general educational information only. The information offered in this post does not constitute legal advice and reading the information does not create an attorney-client relationship with Nancy Roberts or the Roberts Law Firm. You should not rely on this article as legal advice. Before taking any action, you should always seek legal advice from an attorney you hire, who advises you based on your specific facts, circumstances, situation, and the appropriate governing law.