Wednesday, May 19, 2010

How Not To Leave Money To Your Son-in-law or Daughter-in-Law?

The number one concern that I often hear is that parents do not want their son-in-law or daughter-in-law to access their inheritance in case of a divorce. The divorce rate is this country exceeds fifty (50) percent. Many parents are concerned that their inheritance will be subject to their child's divorce proceeding. This is a valid concern. This blog will discuss how to not leave your money to your son-in-law or daughter-in-law.

A will does not protect your inheritance from a divorcing spouse. For example, Ida is a widow and dies at the age of 83 years old. Her daughter is 50 years old, Laurie, and her son is 45 years old, Jack. Her daughter is married to John and John and Laurie are going through a divorce. Ida leaves Laurie and Jack each $125,000 and fifty (50) percent of the family house in the Naperville, Illinois worth $350,000. The house in Naperville is paid in full with no mortgages. In this example, John, the divorcing son-in-law will be entitled to fifty (50) percent of Laurie's inheritance. The inheritance, which was meant for Laurie has a creditor, John, which is a threat to her inheritance. Therefore, a will is a bad instrument to protect against a son-in-law or daughter-in-law from getting access to your adult children's inheritance.

In contrasts, a living trust or otherwise, known as a "Revocable Living Trust", is an excellent vehicle to protect your adult children against a divorcing spouse. In a Living Trust, the Trustor or creator of the Trust can create a "spendthrift provision", which restricts your beneficiary's inheritance from being subject to a divorcing spouse or any creditor of your beneficiary. For example, using the above example, Laurie's inheritance would be protected against her divorcing spouse, John. Now consider, what if Laurie had a mortgage foreclosure case filed against her and she was getting an inheritance. With a living trust, her inheritance is protected. On the contrary, a will does not have a spendthrift provision, and a person's inheritance is subject to creditor's claims and divorcing spouses.

Sean Robertson, Esq.
Robertson Law Group, LLC
(312) 498-6080 or (630) 364-2318

No comments:

Post a Comment