Let’s pretend that upon your death, you leave your assets to your children. All of them have good jobs, manage their finances well, and are happily married.
A few years go by after your death, and one of your children ends up going through a divorce.
Does your trust protect the assets you’ve left to your children from the divorce?
In most trusts, the answer is no. This means your hard-earned assets that you leave to your children could end up in someone else’s hands.
Yes, your in-laws or your child’s ex can get your money. How does this happen? You die and leave your money to your child. They invest the money or just put it in the bank. If they are super careful, they keep everything separate so when they divorce, the money is clearly their separate property. However, we all know that this doesn’t happen most of the time.
Most people inherit money and buy houses, cars, or invest and add their spouse to the title on the house or car, and open the investment in both names. When they get divorced, the ex-claims ownership, and your money goes to the ex!
You can create an Inheritance Protection Trust that will make sure this can’t happen. I did this when I drafted my mom’s Trust. Her money went to an Inheritance Protection Trust. She did not want a dime of her money to go to my husband, and there is no way this could have happened. If you want to protect your child’s inheritance, let me know so when your Trust is completed, it will accomplish this goal.
