How to Protect Your Children’s Inheritance in Divorce
Inheritances are not treated the same way as normal marital property in a divorce. Generally, so long as there has not been any commingling with marital property, an inheritance can remain separate property, just like premarital assets. Commingling occurs when separate property, usually money, is mixed with marital property. For instance, depositing an inheritance check into a joint bank account is likely to convert it from separate property to marital property.
From time to time, a parent will need to take precaution to make sure their children’s inheritances are safe from their own spouse, or their adult child’s spouse. This issue is particularly pronounced for non-marital children, or when parents believe an adult child is at risk of divorce.
Although non-marital children will have inheritance rights if you die without a will, it will require going through the probate court and potential disagreements. Parents often want to ensure that children born prior to, or outside of marriage will be able to inherit without that difficulty.
Generally, upon death, each spouse can bequeath their own separate property as well as their share of the marital property how they see fit. This means that a parent who wants to make sure their child born outside of their current marriage will inherit should specify that in their will.
Adult Children at Risk of Divorce
When a parent is concerned that their adult child’s spouse may attempt to take part of an inheritance in a divorce, legal steps can be taken to protect the inheritance. For an inheritance to be regarded as separate property, the property cannot be bequeathed to both your child and their spouse. A will should specify that the inheritance is only for your child. However, even if you leave property to just your own child, if they do not treat the property as separate property and mix it with marital property, the mixing can lead to confusion during your child’s divorce.
A popular way to protect a child’s inheritance is by creating a trust solely in the name of your child in your will. By using a trust, a parent can ensure that their child’s disgruntled, soon-to-be ex-spouse, won’t be able to lay claim to an inheritance.
Published at Fri, 19 May 2017 12:59:52 +0000