Estate planning requires you to consider many scenarios when divvying up assets. One may concern your children, and more specifically, their spouses.
While you may want to leave your children an inheritance, you may not want it to fall into the hands of a spouse. Fortunately, fiduciary tools exist that may help. Discover some of the issues an inheritance trust may solve.
Ensure children benefit
Creating a trust provides asset distribution and protection. A trust allows assets to pass directly to the person or persons you name as grantees. In the situation where you want your son to inherit, but not his wife, you may create a trust with only him as the grantee. The assets are his and become his separate property.
Allow your grandchildren to inherit
Setting up an inheritance trust means you get a chance to control how you want money to flow through your family. When your children die, the trust will pass directly to your grandchildren and not the spouse.
Stop asset intrusion
Stopping other people from accessing your children’s assets may remain at the forefront of your estate plan. An inheritance trust may do more than keep cash away from an irresponsible spouse. Should your child divorce, the trust is not marital property and not subject to dividing. If your child faces a lawsuit, the trust does not become part of a judgment towards paying an award.
Establishing an inheritance trust takes the emotional factor out of the equation and keeps awkward conversations at a minimum.