It is not unusual for a parent not to fall in love with their child’s choice for a spouse. They may even go as far as to try and make certain that their daughter- or son-in-law does not get their inheritance.
You can shield your money from your new son-in-law, says nj.com’s recent article “My daughter is getting married. How can I protect her inheritance?”
A good strategy is to create a trust, either as part of a will (called a Testamentary Trust), or a living trust that would receive the estate assets for the benefit of the child and the child’s children.
A trust is a fiduciary arrangement that lets the trustee maintain trust assets, on behalf of a beneficiary or beneficiaries.
Trusts can be created in many ways and can specify precisely how and when the assets can be allowed to pass to the beneficiaries.
The trustee is a person or company that holds and administers the trust assets for the benefit of a third party. A trustee can be given a wide range of authority in the trust agreement. The trustee makes decisions in the beneficiary’s best interests, and they have a fiduciary responsibility to the trust beneficiaries.
Trust assets can be used for the health, education, maintenance and support of a child. The assets that are left over (if any) at the death of the child and any remainder are directed to go to the grandchildren outright or in trust.
Provided the assets distributed to the daughter are not commingled with the assets of her husband, those assets would not be subject to equitable distribution, if the couple were to one day get divorced. If designed properly, assets can go into a specifically designed trust for the child that will protect the inherited assets against lawsuits, the beneficiaries creditors, bankruptcy and yes, divorce. A professional estate planning attorney can explain and design such a family protection plan for you and your children.
The daughter can also enter into a prenuptial or postnuptial agreement. With this type of agreement, her spouse waives the right to any assets inherited by the daughter.
Talk these types of situations over with a qualified estate planning attorney.
Reference: nj.com (September 27, 2019) “My daughter is getting married. How can I protect her inheritance?”