How to Protect Your Child’s Inheritance
If you’re leaving an inheritance to your children, you may wonder if something may happen to that inheritance after it goes into your child’s hands. This is your life’s hard work, and you want to make sure it stays with your child or another beneficiary. However, there are straightforward ways to protect your child’s inheritance from a spouse, creditors, or your child themself. If you’re wondering how to protect your child’s inheritance, proper estate planning and establishing a trust are vital steps to take.
Establish a Trust
You’ve probably heard of establishing a trust for any inheritance left to minor children until they become an adult. You can also put your adult children’s inheritance in a trust. When you place your child’s inheritance in a trust, it protects it from various scenarios.
A common reason parents decide to put their child’s inheritance into a trust is if their child gets a divorce in the future. If your child’s inheritance is in a trust, the money in that trust will not be split between your child and the ex-spouse in the event of a divorce. However, once that inheritance comes out of the trust and becomes intertwined with your child and their spouse’s other finances, it becomes far more difficult to protect during a divorce.
A trust also protects your child’s inheritance from creditors or if your child ever gets sued. There are laws in place that prohibit creditors from coming after your child’s inheritance if it’s in a properly drafted trust. In addition, if you are concerned about how your child will use the inheritance, a trust allows you to put guidelines in place for how and when your child can use the inheritance. For example, some parents allow the inheritance to come out of the trust at certain ages or milestones.
It’s important to note that your child’s inheritance is protected while in the trust. Once the money comes out of the trust, or if your child receives their inheritance directly, it doesn’t have the same protection that a trust provides. Carefully consider how you establish a trust for your children’s inheritance.
Discuss Your Estate Plan With Family
It’s wise to discuss the contents of your estate plan with your family after you complete it. Your children or other beneficiaries should know exactly what your estate plan states and the trust details if you plan to establish one. This is essential if you have specific wishes for when the inheritance is allowed for your child’s trust.
When you have a wide-open dialogue about your estate and assets you plan to leave to your child, it’s another way to protect your child’s inheritance. Although the only way to ensure your wishes are carried out is to have them adequately stated in your estate plan, discussing your desires will help them know what to expect. Tell your children or other beneficiaries how you plan to protect their inheritance and why you have these guidelines in place.
We can’t emphasize enough the importance of using clear and explicit language in your estate plan, trust, and will. You don’t want to leave any confusion for your loved ones and ensure your wishes are carried out. One way to be completely confident that your estate plan is set and your children’s inheritance is protected is to consult with an estate planning attorney.
Consult a Florida Estate Planning Attorney
There are many pieces to completing an estate plan, and it’s unique to each person. Consulting with a Florida estate planning attorney will help ensure everything is in place. Our law professionals at The Merriman Law Firm are experienced with assisting clients with various circumstances and unique family structures to develop an estate plan. Our mission is to equip clients with enough information to make the best decisions for themselves and their loved ones.
The other benefit to developing an estate plan with an estate planning attorney is that it makes sure that all of your documents and wishes are correctly put into place, so you don’t have to worry about the future. Our professionals at Merriman Law Firm can answer any questions you have about protecting your child’s inheritance or any step in the estate planning process. Schedule a free initial consultation with Merriman Law Firm today.
Protecting your child’s inheritance is necessary, depending on your circumstances. Life is uncertain, so being prepared ahead of time is always a wise move. Placing your child’s inheritance into a trust is the surest way you can protect it from frivolous spending, divorce, or creditors. No matter how you decide to complete your estate plan, discuss your wishes with your children and your intentions with their inheritance. It’s also wise to connect with a Florida estate planning attorney to develop your estate plan. Merriman Law Firm is here to help you with your estate planning as well as the administration and litigation with trusts, estates, probate, and guardianship.