Protecting Inheritance from Divorce

An Inheritance that is not properly protected can be divided between divorcing spouses in family court. If you leave an estate to your adult child and he or she gets divorced, the money and property you left behind could end up in the hands of your child’s former spouse. Likewise, if you and your spouse end up divorcing, money and property you intend to leave to your kids could be lost to your ex-spouse if not properly protected. Your Dayton estate attorney can help you set up the proper documents and entities needed to ensure the inheritance you leave behind goes to the people you intend it to go to.

Protecting Inheritance from a Beneficiary’s Potential Divorce with a Legacy Trust

If your adult child receives their inheritance during a marriage and a divorce occurs, the family court handling the case may view the assets as joint property and give at least half of it to your child’s former spouse. However, a Dayton estate attorney can help you avoid this problem by setting up a legacy trust inside your revocable trust for the money, property and other assets you intend to pass on.

Advantages of placing your estate assets in a revocable trust:

• You control who makes use of the assets and the conditions under which they may use it
• The assets can remain under the ownership of the trust — since the beneficiary never takes ownership, a divorced spouse can’t lay claim to the inheritance
• An independent trustee can be assigned to the trust so that cash disbursements or other uses of the assets have to be approved.
• Because the trust is revocable, you can change the beneficiaries or distribution terms, or even completely revoke the trust, at any time before your death

Protecting Estate Assets from Your Potential Divorce with an Irrevocable Trust

Nobody likes to think their marriage will end in divorce, but divorce rates in America tell us that we must consider it a possibility when protecting the assets we intend to leave as an inheritance for our children. One of the most reliable asset protection devices for this purpose is the domestic asset protection irrevocable trust.

Advantages of placing your estate assets in an irrevocable trust:

• You control who makes use of the assets and the conditions under which they may use it
• Ownership of the assets is transferred to the trust — neither spouse can lay claim to the inheritance
• An independent trustee can be assigned to the trust so that cash disbursements or other uses of the assets have to be approved.

Because the trust is NOT revocable, beneficiaries and distribution terms cannot be changed, preventing an order from family court requiring revocation of the trust and making its assets subject to division in a divorce — this can also be a disadvantage in some circumstances