How to Protect Your Estate against Your Child’s Possible Future Divorce

by | Jul 22, 2021

How to Protect Your Estate against Your Child’s Possible Future Divorce

By: Barry E. Haimo, Esq.

July 22, 2021

Family relationships can be complicated — especially when it comes to your adult children. After all, you can plan your own legacy through estate planning, but even the best-laid plans can be threatened by the choices and circumstances in the life of your adult children. 

One prime example of this? The possibility of their getting a divorce. So, how can you protect your estate and your child’s inheritance from their possible future divorce? 

Many people take part in estate planning to ensure that no outside presence can take what they’ve worked hard for away from their family. Divorce is no different, and thankfully there are several ways you can prevent your adult child’s spouse from claiming your assets if a divorce takes place.

Protect your family and assets and gain the peace of mind of knowing you’re prepared and in control. Here are just some of the safeguards you can put in place.

Put Assets in a Trust

One option? You can protect the inheritance you want to leave your child through a trust.

A trust requires a settlor to create the trust, a trustee to hold the trust property, and a beneficiary who ultimately benefits from the trust.

You will be the settlor of the trust, which means you can distribute your assets to whomever you see fit after your death. In a properly drafted trust, the assets held there can only be accessed by the specific people or entities you name — not by an angry ex-spouse. That means if your adult child ever gets a divorce, the assets named in the trust are not considered marital property and, therefore, will not be a part of the divorce proceedings.

You can use  trusts to accomplish different goals to protect these assets.

  • A revocable trust with longer-term benefits can ensure your child receives distributions at later ages, which may help to mitigate the risk divorce can bring with it to their inheritance.
  • You can also create a revocable trust that holds your child’s assets for their lifetime, and then their inheritance can go on to their children when they die.
  • Finally, an irrevocable trust can be used to benefit your child and offer the most protection from creditors – including any potential spouses or exes.

Ask for Prenuptial Agreements

A prenuptial agreement can be a sensitive topic, but if you have a considerable estate that will pass on to your children one day, then it’s something that should be considered. Explain to your family that a prenuptial agreement helps to protect their assets. You can even make it a condition of the inheritance if you so desire.

It’s a good idea to seek help from an experienced attorney when drafting a prenuptial agreement to be used to protect you and your children’s assets.

What Else Can You Do?

There are other tools you can utilize to protect your child’s inheritance. But first and foremost, it’s crucial that you let others in the family know your desires. That’s why any estate plan you create should have unambiguous language that clearly explains what you intend to happen and what your wishes for your estate are. With our 4-step unique proven process, leaving a legacy you can be proud of is easier than you think. The alternative can mean significant taxes, chaos, court, costs, conflict (litigation) and a host of unpleasant and destructive surprises. Call us to get started today.

Author:
Barry E. Haimo, Esq.
Haimo Law
Strategic Planning With Purpose®
Email: barry@haimolaw.com

YouTube: http://www.youtube.com/user/haimolawtv

 

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