How To Keep Your Children's Exes From Taking Their Inheritance
Although your children marry expecting to be with their spouses forever, there's a good chance the relationships will end in divorce, and there's a real risk your kids' exes will take some or all of their inheritance. If you want to ensure your children's spouses can't get their hands on any money or assets you leave your heirs, here are a couple of ways you can protect their inheritances.
Ask for a Pre- or Post-Nuptial Agreement
Technically, inheritances are classified as personal property, which grants them a certain amount of immunity by law from being given to soon-to-be ex-spouses during a divorce. Unfortunately, it's relatively easy for inherited assets—especially money—to be reclassified as marital property with a simple act, such as putting a check from a parent's estate into a joint checking account.
One way to ensure your child's spouse doesn't gain access to his or her inheritance is to insist the person sign a prenuptial or post-nuptial agreement where the person essentially gives up any rights he or she may have to it during the marriage. For instance, if you plan on giving you daughter a house, you can have her spouse sign an agreement stating he or she won't claim any legal rights to it.
Of course, this avenue requires your child to cooperate, which may be a challenging feat depending on the type of relationship you have with your offspring. However, being honest and clearly outlining your concerns and goals can go a long way towards getting the outcome you want.
Create a Trust
If having the couple draw up and sign a pre- or post-nuptial agreement isn't an option, another way you can protect your child's inheritance is by putting it in a trust. In this situation, the trust would actually be the owner of the money and assets and your child would be the beneficiary. You can set up the trust to allow your child to access the assets in a variety of ways without putting the items held in the trust at risk of being taken by your child's spouse.
For example, you can have the trust give your child a certain amount of money each month for his or her needs. Even if your child deposits the check into a joint account, only the money that was placed into the account would be considered marital property, not the entire inheritance.
There are quite a few legalities involved in setting up a trust, so it's essential you work with a knowledgeable attorney about this option.
For more ideas on protecting your children's inheritance or advice on other estate planning issues, contact a lawyer or visit a site like https://www.linskylaw.com.
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