Is it Possible to Protect an Inheritance from a Potential Ex-Spouse?
You want to leave money to your married child, but you do not want their spouse receiving it in the event of divorce. Below are some options you have.
The time when an adult child gets married is often a joyous time for the entire family, but sometimes, the parents of that child have concerns. Maybe you do not get along with your child’s partner, or maybe you know they are a much higher earner and worry about what will happen to your child if they get a divorce.
Leaving your child an inheritance is a great way to set them up in the future, whether they are getting married or not. However, how can you ensure your child’s spouse will not receive any of it in the event they get divorced? Fortunately, you do have some options available.
Inheritance is Separate Property
In Texas, anything inherited by an individual is their separate property. However, what often happens is that separate property inheritance is often commingled with community property accounts or assets. This commingling makes tracing the separate property monies difficult and expensive in a divorce proceeding. If assets are inherited, great lengths should be taken to ensure those separate property assets are not commingled with community property assets. For example, any financial account should be titled solely to the individual who inherited the money. And if at all possible, the account should include the phrase “separate property account” and the account monies should not be utilized to invest in or pay towards assets that will be community property assets.
Create a Trust
By creating a trust, you can leave assets to your children and ensure they will have sole control over the inheritance. In order for a will to be valid, three individuals must be involved. One is the grantor, settlor, or trust maker, which is you if you are creating the trust. The second party is the trustee, or the person who controls the trust. Lastly, there is the beneficiary, which is the person who will benefit from the trust.
When you properly draft your trust, neither your child’s spouse nor anyone else can access the trust or the inheritance left within it. If your child does get a divorce, any inheritance left within the trust is not subject to property division hearings. You can name your child as trustee of the trust, which allows them to control what happens to it. Or, if you are worried that they will share the inheritance with their spouse, you can name someone else as the trustee.
Draft a Prenuptial Agreement
Of course, you cannot force your child to enter into a prenuptial agreement with their spouse. However, you should have a conversation with your child about the importance of a prenuptial agreement and how it can protect their inheritance in the event of a divorce.
Like a trust, if a prenuptial agreement is well drafted, your child can control what happens to their inheritance in the event of divorce and make sure they can keep it. Again, while you cannot force your child to enter into this type of agreement, you can place a condition on the inheritance and make a prenup a requirement before your child receives the inheritance.
Our Texas Estate Planning Lawyers Can Protect Your Child’s Inheritance
If you want to leave an inheritance to your child but want to protect it from their spouse or anyone else, our Brazoria County estate planning lawyers in Lake Jackson at Cordoba Law Firm, PLLC, can help. We know the proper documentation to draft and will ensure it cannot be challenged or contested in court. Call us today at 979.297.2854 or fill out our online form to schedule a consultation.