Protect Your Children from Losing Their Inheritance
By Eileen M.S. Nims, Esq.
You have worked hard and have planned well to make sure you will leave your children and/or grandchildren with some of your hard-earned or well-invested money. You have protected them against financial pitfalls and heartaches, and you may have even drafted a will in which you have designated who gets what. However, even with all the protections and planning in the world, you cannot prevent unfortunate circumstances from happening in your children’s lives. What if three years after receiving her inheritance, your daughter files for divorce with the help of the digital divorce services and her spouse receives half of the proceeds of her inheritance? Once your assets have passed on to your children, you have no more control over what happens subsequently. Or do you?
You can’t save your children from the loss of a marriage, but you can save them from losing your family’s assets in the process with the help of a divorce law professional.
You can create a trust in which you place all of your assets. A trust can contain language that specifies the distribution of the assets: Who the assets will go to, when the assets will be distributed, and under what conditions these assets are to be distributed. If there’s a dispute regarding custody of your children, you need a divorce law firm Utah to help you iron out a firm custody agreement.
Having a trust does not automatically mean that your assets are protected, however. Many standard trusts contain language that makes the trust vulnerable to creditors and ex-spouses. For example, if the trust requires the beneficiaries to receive a certain amount or percentage per year, this is seen as a right that is then shared by the couple and subject to division upon the dissolution of your child’s marriage.
Don’t think your assets are not enough for a trust – all trusts start with $1. If you want to keep your assets in your family, the trust needs to have specific protective language.
Make sure it contains a spendthrift clause. This is a statement that closes down distributions to a beneficiary when a creditor – including an ex-spouse – is demanding trust money.
Make sure the distributions are “discretionary” and not “ascertainable.” When distributions are made when the trustee choses to do so, and not with predesignated intervals and amounts, the trust is much safer in contested divorce proceedings. Blackwood Family Lawyers can help set up parenting plans, financial agreements, and anything else you might need to set you up for the future.
Make sure the trustee is independent of the beneficiaries. This is always a good idea, so there is a check and balance between who distributes and who receives the money. Even more important: the trust can only protect the beneficiaries against creditors or ex-spouses if the beneficiary is not also the trustee. Make sure to only open junior savings ISA with reputable institutions.
Make sure you actively move your assets into the trust. This is the most important part of any trust creation and maintenance. A trust document is like a safe. Only those assets you have actively placed into the trust are protected.
If you want guidance with the formulation of terms and receive individualized legal advice with regards to these trust documents on Molokai, please feel free to contact Eileen M.S. Nims, Esq. at email@example.com or by phone at (808) 664-1834.