After working hard for many years, many parents hope to ensure that their children will benefit from this labor by receiving an inheritance after they pass. Estate planning is an important process that helps to define who will receive which assets. In some cases, however, parents have concerns over a child’s choice in a spouse or life partner and worry that a future divorce could result in the ex-spouse retaining a portion of their hard-earned assets. Fortunately, there are estate planning tools that can be utilized to guard against this occurring.
Actions That You Can Take to Guard Against a Child’s Divorce
Estate planning is best done under the guidance of a knowledgeable professional. Guarding against a child’s possible divorce is one unique issue that will benefit from the help of someone experienced in this field. Following are some of the options that an attorney might suggest if planning for divorce is important to you when creating your estate plan:
- Put your child’s share of your assets into a revocable trust that is held for his benefit for the long term. Perhaps your child receives distributions of trust principal only at later dates, such as age 45, 50, and 55. You can choose any age that you feel is appropriate. This may help mitigate the risk of a divorced spouse taking a share of your assets.
- Create a revocable trust that will hold your child’s share of the assets for his entire lifetime. Once the child passes, the assets can pass to grandchildren or another beneficiary of your choosing. While your child is alive, the trustee can provide him with funds for his support. For example, if you own a home in Orange County, you could place the house in trust and instruct the trustee to allow your child to live there or earn income from renting it out. When your child passes away, your grandchildren could take title to the property.
- Create an irrevocable trust for your child’s benefit. While there are certain drawbacks to this type of trust, they often provide the best protection from creditors, including a spouse.
While these are some of the more common options available to parents who have concerns over a child’s possible future divorce, every situation is unique. The Law Office of James F. Roberts & Associates, APC, has helped many clients create the estate plan that is right for their family. We invite you to view our client testimonials page today to learn more.