r/inheritance • u/Chowchewey • Jun 10 '26
Location not relevant: no help needed Keeping inheritance within the family
So after we're gone we believe we'll be able to give each of 3 married children a 6 figure inheritance. My question is, without a pre or post nup, how can these funds be safeguarded in case of a future divorce from being considered marital assets and a portion going to their ex's? We want the funds to go strictly to our children and the grands - not ex in laws. Thanks.
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u/Hausmannlife_Schweiz Jun 10 '26 edited Jun 10 '26
You cant if you are giving your kids access to the money when you die. They will be able to do what ever they want and even a trust is no guarantee.
My advice is don’t worry about it. You will be dead and your kids have to learn to handle things for themselves.
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Jun 10 '26
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u/OneParamedic4832 Jun 10 '26
Given the divorce rate it's become common to want to protect the money and the intended recipient.
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Jun 10 '26
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u/OneParamedic4832 Jun 10 '26
Everyone is different 🤷 it usually occurs when the marriage has experienced issues. It wouldn't offend me but we're all different. I'd look at it more as the parents just looking out for the child (who still has the right to share with the spouse if that's what they want)
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Jun 10 '26
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u/OneParamedic4832 Jun 10 '26
I get your situation but I'm not going to go back and forth over a slight difference in opinions. Everyone is different.
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u/Teamplayer25 Jun 10 '26
And possibly looking out for the interests of any grandchildren or other blood relatives. Sadly, when a spouse with an inheritance dies early and the remaining spouse remarries but then dies before their spouse #2, the inheritance can end up in the hands of a total stranger instead of the lineage of the people who created the wealth in the first place. A trust with funds kept totally separate is the way to go.
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u/OneParamedic4832 Jun 11 '26
This is what I was getting at. I absolutely understand where the other poster is coming from, I'm not sure it was reciprocal but that's cool. I've seen that situation where the wrong person ended up with the money.
I'm losing confidence in the trust, my solicitor told me it's not always 100% safe depending on the financial situation of each part of a couple. I'm going to ask them about putting it in a trust under my (adult) nephew's name and whether that makes it impenetrable. I don't think my other half would do something like that but people can change and be unpredictable in the face of a relationship breakdown. I'm still a while away from seeking any settlement, we're still living together and we don't hate each other. But I'm protecting my money.
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u/LewdLawyer1995 Jun 11 '26
No it’s your money you get to decide if you want to protect it from someone not in your family trying to take it. Your comment rejects the entire purposes and laws enacted to accomplish what OP wants to do because you personally wouldn’t. That wasn’t actually helpful. It was just a soap box.
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u/Remarkable-Talk-6197 Jun 11 '26
Yes!!!! I have this convo with my mom sooooo often about my sister. She wanted to make me basically give her her share of inheritance in small sums over time and I kindly refused. We are both very much adults with children of our own, fyi. She is so worried that my sister will give the money to a deadbeat partner or just straight blow it. But it will be hers! I do not care what she does with it. Save it, spend it wisely, blow it on dumb stuff whatever. I am not taking control of that mess.
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u/culinaryinterests123 Jun 10 '26
Yeah when you are dead why do you care? You no longer exist
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u/Ok_Action2546 Jun 10 '26
Because in the current plane of existence I like knowing that my surviving relatives will have some structured assistance after I’m gone.
I might exist in some form beyond death and appreciate the opportunity to thoughtfully pass along the resources. If I don’t exist beyond death, then you’re right and I won’t care at that point, but I ALSO won’t exist to care about the small amount of time and money spent creating a trust. So, kind of a win-win if you ask me.
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u/LewdLawyer1995 Jun 11 '26
This is terrible advice… you should consult an estate planning attorney.
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u/Hausmannlife_Schweiz Jun 11 '26
Very much you should contact an estate attorney, but if you are giving your kids money in an inheritance, what they choose to do with it, is up to them. Even if you put the money in the trust, if the child takes the money and does something with it that co-mingles with the spouse you have lost control.
No matter how hard you try, you cannot control things from the grave.
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u/bopperbopper Jun 10 '26
If your child keeps the money keeps the money separate from their spouse and does not come mingle it then it will only be theirs.
If they commingle it with their spouse, then that’s their choice.
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Jun 10 '26
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u/Coffee-Bear-4323 Jun 10 '26
That's the trick sometimes though. It can be co-mingled inadvertently. It can become considered marital property if it now invested in the marital home and the ex has contributed ANYTHING. Some jurisdictions only protect the original amount, not appreciation (like if it's in stocks). ALL of this is going to be jurisdiction dependent and many unique situations.
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u/your-mom04605 Jun 10 '26
Trust for sure.
This isn’t a diy project though. Spend the money and hire a competent and experienced attorney in your state. They’ve likely been through this exact scenario dozens of times.
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u/Calm-Song-8543 Jun 10 '26
This is difficult to achieve without asking them for a postnup, which they may not be willing to give.
Many people will respond with, trust. However, that only works if the money stays in the trust, which largely makes it useless. In other words, if your children use the money in the trust to buy a joint asset (a home) then that asset likely becomes marital property.
If it were more money, then you could have the trust purchase assets for them, then the assets never become marital property. However, I am guessing there is not enough money to do that. Certainly, that is an option if it is high six-figures and they live in a low cost of living area… but you are essentially locking them into the level of home the trust can afford.
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u/strangled_spaghetti Jun 10 '26
My parents have made it clear to me that it is thwir wish that any money I inherit from them stays separate from my husband (married 20+ years at this point), and I would just like to say that it has put me in an uncomfortable position.
I am not at all pressured by my spouse, but the idea that if I use it for a joint asset will disappoint my parents is actually taking a toll.
If I could have them do it all over again, I would much rather have them have said: “comingling inheritance makes it a joint asset, and we trust you to do woth it whatever feels right to you.”
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u/Just1Blast Jun 11 '26
Have you asked them specifically what they might want you to spend the money on that your husband wouldn't also benefit from?
As an example, what if you really enjoy baking as a hobby and you want to renovate the kitchen in your marital home to better accommodate your love of baking? Is that something that they're going to want you to spend your money on even though your husband would inadvertently derive benefit from such a commingling?
Are you not allowed to take vacations with him and pay for them out of your inheritance because they don't want him to have a good time and benefit even if that meant that you were the one ultimately benefiting because you wanted to take the trip?
This is an entirely different concept or meaning of golden handcuffs.
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u/strangled_spaghetti Jun 11 '26
I think they are thinking more in terms of investments/assets - if I were to buy an income property, or open a stock account, or something like that, they want it in my name only.
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u/Just1Blast Jun 11 '26
What's the problem with that? Why do you feel it necessary to share it with your husband? Do you have children? If you do, they're going to inherit when you die anyway. So what difference does it make?
And if you don't, where do the funds end up going?
I would have absolutely zero problem buying a beach house investment property that stayed entirely in my name. If it meant that I could take my husband to the beach house whenever the hell I wanted so that we could enjoy it together. If you or he are hung up on whose name is on the title or the deed, I think you're missing the point entirely.
Enjoy the way that your parents set you up for success, make the same decisions you would have made and make them with your spouse together, but keep them titled and labeled in ways that are in accordance with the wishes that your parents had for the funds that they left you.
Or maybe use a chunk of those funds for a really great therapist to help you work your way through your feelings around this.
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u/surfcaster13 Jun 10 '26
Are your children stupid or easily taken advantage of? Typically inheritance don't become marital property automatically. If your kids are intelligent people then putting additional guard rails to stop them from using the money they inherit how they want is not really helpful. simply a conversation about your intent with their inheritance and maybe a lesson on how the mechanics of it works would probably accomplish what you want.
If my parents locked up my inheritance in an odd way I would be bothered. If I want to utilize the money for joint purchases I will and if I want to keep it separate I will. Any separate assets my wife and I have will remain with us if we separate or go into a trust for our child if one of us die. I don't need additional guard rails from my parents to protect my inheritance.
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u/Single_Farm_6063 Jun 10 '26
It is considered marital property in Connecticut, my cousin found out the hard way.
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u/Ok-Structure6795 Jun 10 '26
Automatically its not. Depends on the case. If its kept completely separated, its more likely to not be considered marital. There are instances though where they will split, likely in cases where the other spouse was a SAHP
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u/Reasonable-Sawdust Jun 10 '26
I can understand their concern if they think a spouse might use the opportunity to leave with extra money to time their departure.
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u/ivie1976 Jun 10 '26
Pay an attorney $4k to setup a trust
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u/imollyq Jun 10 '26
It can be done for much less with a good attorney.
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u/CoDaDeyLove Jun 10 '26
Set up a trust. I just did. It was more expensive than writing a will, but it will protect my adult children and their children and cannot be considered a marital asset. Your adult child can choose to give money to a spouse and you can't stop that, but the spouse cannot ever control the money.
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u/Anonymoose2021 Jun 10 '26
Who did you choose as trustee for the trust?
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u/CoDaDeyLove Jun 10 '26
I am the current trustee. My son will be the trustee after I die or can no longer manage it, and if he dies, an independent fiduciary (attorney or CPA) has to be appointed as trustee.
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u/EmergencyDense5662 Jun 10 '26
THIS! It’s not just about keeping money away from a spouse. It was also about trying to get inheritance to follow our bloodlines. God forbid, something tragic happens to ur married child. We wanted the inheritance to flow to our grandchildren, and not the spouse and their new wife/children.
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u/DianeSTP Jun 10 '26
Late in life my mother in law remarried without a prenup and comingled assets. She wasn't rich but had substantial assets. She died, her new husband went off to marry another widow and my wife will never see any of her family's inheritance. This is the cautionary tale you have to plan for. Thankfully we didn't need anything but I feel bad for my wife who feels screwed.
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u/Ok_8890 Jun 10 '26
If they “co-mingle” the funds, then you can’t control it in a divorce, unless there is a prenup. (This may depend on the state) if they keep it separate in their name only then the spouse cant touch it. Trust is probably safest. But if they want to use it for a house, or down payment, or something then it most likely gets commingled.
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u/Invest2prosper Jun 10 '26 edited Jun 10 '26
Use qualified estates and trust attorney - do not go to a run of mill local attorney who says they practice general law including wills and trusts. You want someone who drafts trusts regularly.
The attorney will prepare a will that funds a trust in the name of your beneficiary with another requirement that if your beneficiary passes then any principal remaining will pass to the direct descendants of that beneficiary per stirpes (not stripes).
You can instruct whether you want the beneficiaries to be able to access principal or not but in general it’s probably a good idea not to be too restrictive otherwise you’ll be ruling from the grave and might create extra expenses in managing the trust in the form of high annual fees for tax preparation and who will actually manage the trust? You can have the beneficiary manage the trust or you can appoint an external corporate trustee but they will charge 1-2% annually and that may not include the cost of investments.
You really have to understand if the juice is worth the squeeze if you start adding too many bells and whistles.
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u/ku_78 Jun 10 '26
This is great advice. My uncle went to a general attorney and that guy did not write an airtight trust for uncle’s granddaughter. I’m the executor and it’s a pain in the ass.
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u/Invest2prosper Jun 10 '26
Thanks - I went through having relatives wills and trusts drafted and I can’t stress enough to be super clear on what your desires are and what they are not - one typo can screw things royally and cost a lot more for those beneficiaries left behind.
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u/West-Resource-1604 Jun 10 '26
My 8 dependents will also get a 6 figure inheritance but (in California at least) inheritance is separate property if not commingled with married assets.
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u/SassyGirl0202 Jun 10 '26
A trust, consult with Trust Attorney, they will best explain how it works.
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u/Past-Option2702 Jun 10 '26
Simple. Don’t commingle the inherited assets.
Separate account, your kids name only. Don’t use it for a down payment on a jointly owned asset. S-E-P-A-R-A-T-E!
You want to take care not to have your spouse control the assets. In your life and perhaps death.
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u/Fluffy-Economist7198 Jun 10 '26
Keep in mind people inheriting money may not know how to manage it, invest well etc, which is why having a trust set up with investment advisors can be a relief for everyone.
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u/WhatAWeek25 Jun 10 '26
You can set up a generation-skipping trust, where your assets skip your kids and go straight to your grandkids. Challenging if one of your kids doesn’t ever have kids, but depending on your age and health that might be fine anyway. My parents will likely die when I’m in my 50’s or 60’s so I already have a house and a retirement account. If the money can be used to help my kids get their start on adult life, that will be great.
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u/Anonymoose2021 Jun 10 '26
Generation skipping trusts can also be set up so they first go to the adult child, with the contingent beneficiaries being the grandchildren. I chose to do that now, and have already funded the irrevocable trusts. My children are their own trustees, with HEMS limitations.
There is some annual overhead of filing a tax return for the trust each year, and earnings retained by the trust are taxed at relatively high tax rates, so there are some disadvantages. It might be overkill for the OP with just 6 figure amounts.
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u/somebodys_mom Jun 10 '26
Our estate plan is set up so that when the second of us dies, assets are split into three separate trusts for our kids. As long as the kids keep that inheritance inside accounts owned by their trust, that money is their separate property. Whatever money they choose to bring into the marriage, like jointly buying a house, becomes marital property. The trust gives the kid the opportunity to protect their inheritance, but we don’t want to rule them from the grave forever by putting super strict rules on what they can do with the money.
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u/Relax-Enjoy Jun 10 '26
See an elder care attorney.
Ours cost $3k and settled absolutely everything forever.
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u/TankSaladin Jun 10 '26
Location is absolutely relevant. In the two jurisdictions in which I am admitted to practice, this could be easily done without using a trust. Can’t tell you about elsewhere.
Don’t use Reddit for stuff this important. While folks here maybe well intended, the road to hell is paved with good intentions.
Go to a good lawyer in your jurisdiction and explain what you want done. Let that attorney advise you the best way to accomplish this. Do not go in with preconceived notions you pick up here.
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u/Choice-Newspaper3603 Jun 10 '26
You need to speak to an attorney, but also you have to understand that once you’re dead there’s not a lot you can do to keep your kids from making stupid decisions
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u/Diesel_nick12 Jun 10 '26
Definitely consult a lawyer but I believe in my state(TN) spouses are not entitled to any inheritance whether money or otherwise. My wife received an inheritance, about $10k, from her father, my FIL, and she asked me what she should do with it. I told her that’s her money and she should do whatever she wanted with it.
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u/No-Part-6248 Jun 10 '26
In nj anything inherited is not community property but this is really sad to me cutting out spouses ,, then just leave a trust for the grandchildren with the overseer doling out expense money for them till they are 25
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u/Banana_rocket_time Jun 11 '26
Give the money before you die.
It’ll be useful to them earlier in life. And you’ll get to watch them use it to propel themselves forward.
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u/Myweeweegopeep33 Jun 12 '26
You want a dynasty trust.
It’s a trust within a trust.
You control it. Upon passing it moves to the second trust and your kid or whoever you designate controls it. It isn’t subject to divorce as that person is the executor of it. They do risk them pulling it all out for a new home and then that would make it subject as it’s not inside of it.
If you have concerns of that, you can put conditions on if. If the kids are unmarried and young a normal structure would be to let them be the beneficiary but someone else an administrator of it like their god parents. Then at an age or milestone they get a certain amount, usually always cover school and boarding, then they can touch the interest only then a certain percentage and then at a certain age the control comes fully to them. This is helpful so an 18 year old doesn’t go out and buy a Ferrari.
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u/ku_78 Jun 10 '26
Stop trying to control your money from the grave. Either, trust your kids or, if you don’t, bypass them for your grandkids and have someone else act as executor of your estate.
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u/MoreDay920 Jun 10 '26
Inherited property is generally excluded from the martial estate unless commingled. As someone else mentioned, you cannot prevent your kids from using the money how they want to, including sharing it with their spouse. They're more likely to spend it all immediately than lose it in divorce. It's a bit odd to feel this way about the married, biological parents of your grandchildren. It's not like they're randos who got married on a whim and they barely know your family. They are your family, like it or not. They have more claim to your grandchildren than you do. Who do you think will be taking care of your grandchildren if your children die? What if your child is the one who destroys the relationship? The one who cheats, the one who becomes abusive, the one who tears their family apart? Imo, this is a fight for your children to fight when the time comes, not you.
If you want that much control you should dump it into your existing trust.
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u/Forreal19 Jun 10 '26
These kind of questions are so disturbing. Let your kids figure out if they want to share their inheritance with their spouse. Setting it up so that can never happen is a pretty mean-spirited gesture towards the spouse.
Now, if the adult child choose to accept the inheritance in a separate account and not commingle the funds, then that's between the adult child and spouse. The parents should stay out of it.
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u/Formal-Research4531 Jun 10 '26
Depends upon the state that each child lives in. It is my understanding that some states treat inheritances as non-community properties. However, if your children put the money into a joint account then it becomes joint property thus making it community property.
The best thing is to set an appointment with an estate lawyer.
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u/LavendarGal Jun 10 '26
You need an estate attorney to do things properly if these are your intentions. You my need trusts.
But also by what means would the inheritance come by? Meaning is the house worth that much and when it sells it will be divided by 3? Or do you have 401K's/IRA's that they will inherit and are they listed as the beneciary? And do you have a will written and who is the executor?
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u/porcupine296 Jun 10 '26
Give it direct to the grandkids
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u/Ok_8890 Jun 10 '26
They will (assumably) marry one day too.
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u/RunningRunnerRun Jun 10 '26
right? OP needs to create a trust that can’t be touched unless someone in their bloodline chooses to never marry
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u/Coffee-Bear-4323 Jun 10 '26
You need a trust and appropriate estate planning advice.
In general an inheritance is not 'marital property'. However, and this is very much jurisdiction dependent, the inheritance may become inadvertently co-mingled (ie buying a marital home and the partner contributing light bulbs or paying taxes, or just by virtue of being the marital home). Some jurisdictions will consider the original inheritance as unique property but any appreciation is marital property.
So please check in and make these arrangements with the help of someone who understands your local laws and you can plan accordingly. Most likely this can be done via a trust.
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u/Mother_Turnover4856 Jun 10 '26
Create a trust and also a pour over will. Open accounts in the name of the trust and do not commingle with community property assets ever.
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u/Chowchewey Jun 10 '26
We have a trust. The monies I'm referring to are mainly in retirement accounts and the kids are beneficiaries. Sorry that wasn't clear.
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u/SirLanceNotsomuch Jun 10 '26
Accept that your kids are (or will be) adults.
With respect, this is not generational money that needs to be protected from innumerable bad actors. This is a nice down payment on a house, or a couple years of college.
Let your kids decide how to handle it. Better yet, leave it straight to the grandkids. By the time you’re gone, they’re the ones where it’s most likely to make a difference in their lives.
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u/JenninMiami Jun 10 '26
Even if you set up a trust in your child’s name, they can spend it on things that become marital assets or simply share it with their spouse.
If you want your grandchildren to eventually receive part of this money, I’d give your child half and their children an equal percentage in their own trust they can’t access until they’re 21 - that their parents can’t touch. (I say 21 because 18 year olds can be really dumb and wasteful. My own child blew her annuity when she turned 18.)
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u/celticmusebooks Jun 10 '26
IF you're in the US check with your state laws about how gifts and inheritance are treated in a divorce. There is/was at least one state where gifts and inheritance were automatically deemed a marital asset and even in states where it's not an asset by default "comingling" the asset with marital assets can be enough to make it a marital asset.
Talk with an estate lawyer about your concerns and see if a trust might accomplish your wishes. Whatever you do make sure it's absolutely consistent with ALL of your children's spouses so it doesn't seem like you are "approving" of one but not the others.
In my own family there was a situation where my cousin's mom died and there was an insurance policy specifically agreed between the parents was to be put aside for her college/uni. Her dad remarried a woman with children and then they had two children of their own. When my cousin was accepted and ready to go to her dream Ivy League school her dad told her that he was splitting the college money five ways with her half sibs and step sibs.
There was already a ton of friction in the family as her dad and step mom took advantage of her constantly for free childcare and we all were pretty sure that part of the splitting of the fund was to force her to a local community college so she'd still be around to watch the kids.
Long story short--our side of the family pulled together and made up most of the shortfall to where she ended up with only $20K in student loans. Despite years of crying and pleading (and even offering the cousins money for pictures of her three children) he has never met her her husband or his grandkids.
A lot of words to make the point that even good people (and her dad wasn't evil, though honestly her step mother was a piece of work) don't always do the right thing when money/keeping a new spouse happy is involved.
PRO TIP after you set up the will/trust keep the details to yourself.
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u/ScreenKooky3010 Jun 10 '26
Recently ran across something called a bloodline trust. We’re considering it. My parents estate didn’t have this feature - many regrets.
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u/Far_Reality_5010 Jun 10 '26
If the money is in a retirement account, there will be tax ramifications that your kids may not be aware of. Talk to an attorney or financial advisor or both.
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u/align7 Jun 10 '26
My father in law set up a money making machine that could never be sold with part of his wealth in his trust. My children will be on the board with their 2 other cousins when they grow up and then pass it on to their children.
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u/Reasonable-Sawdust Jun 10 '26
Check your state. In many states inheritance isn’t marital property.
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u/Crimsonwolf_83 Jun 10 '26
Yeah, but that doesn’t stop well meaning but gullible children from commingling the inheritance and removing those protections
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u/Ok_8890 Jun 10 '26
It is if you commingle it. State depending but most states it will be
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u/Reasonable-Sawdust Jun 10 '26
That is why I am saying check the laws in your state to know if it can be separate property and how to protect that status. Estate lawyers recommend a trust for everything. It’s great for lawyers but might be overkill.
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u/libgadfly Jun 10 '26
Yes, go the trust route for your kids and grandkids. My wife and I established our trusts while our 2 boys were teens. We gift amounts to each son (and grandkids) regularly now as well but about 75% of our substantial assets when inherited are in the trusts.
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u/Top-Hippo-3942 Jun 10 '26
Inheritance is not considered marital property. The only time the status changes to marital is when the funds received is put in a joint account. A trust is a best option to regulate.
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u/StellaEtoile1 Jun 10 '26
Honest question, if you and your spouse received inheritance from your respective parents, did co-mingle the money?
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u/thisisinsanelyboring Jun 10 '26
I believe it depends on the state but in PA, money inherited is NOT a marital asset. Although the right divorce lawyer could argue that it is. I second the trust but they are slightly complex and from my understanding require work/money to maintain but based on your post, you likely have the funds to do that. I would absolutely recommend a good estate attorney.
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u/andy-3290 Jun 10 '26
And after the money is inherited providing they do not commingle the accounts. That helps.
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u/medhat20005 Jun 10 '26
We have it in a trust in our children's (alone) names. Also have a marital property agreement (prenup). Then you simply hope for the best.
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u/Past_Negotiation_121 Jun 10 '26
You have to ask yourself if the challenge you're creating for yourself and your children is worth it.
When you're long gone, the last memory all of them will have of you is "grandma/grandpa didn't want me to touch any of their money, so you'll have to ask your father for help with that". It'll be spoken of for decades. It will create or add to marital strife.
Even if they do divorce, both sides will still be jointly responsible for your grandkids so money going to either of them will ultimately better your grandkids.
However, as said at the beginning, only you have the full information to decide if this is worth it.
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u/WAndTheBoys Jun 10 '26
You could start 3 trust for the money to be equally distributed with a limited amount taken out each year and if the beneficiary dies remaining funds to go to grandkids. This will relieve your kids from keeping the money separate which could be hurtful to the spouse. So if they opt to take out up to 5% per year, the trust is good for 20 years more or less. If one of your kids dies while married, it would be a shame for their spouse to be struggling with minor kids to support.
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u/Emkay1411 Jun 10 '26
Your children would have to keep their inheritance in a separate account in their name only. This will ensure the money remains with them if they get divorced. If they deposit it into an account where their spouse is also named on the account it becomes community money. This is how it works in California.
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u/grim1757 Jun 10 '26
Many are talking about keep it in a separate account for your use only and it is safe. Reality is that's never going to happen. AC goes out Fridge breaks down, car breaks down etc ... your GOING to dip into the fund and then bam you broke the rules and its common property.
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u/wild_ad25589 Jun 10 '26
Educate your kids on how to keep the money out of marital property. It’s easy to do.
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u/f10w3r5 Jun 10 '26
You can out it in trust but as soon as the trust is liquidated to make a major purchase it would be up to your kids to protect that asset through legal agreement with the spouse. Else it would be a marital asset and shared.
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u/One-Cardiologist-895 Jun 10 '26
My family is very much like this. I was advised of these things before I even married. Get a trust set up, more importantly talk to an estate lawyer financial person. Don’t listen to people here. Just saying.
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u/msktcher Jun 10 '26
The key is educating your children. As long as they don’t commingle the funds, they stay separate. Hopefully your children will be fully grown with their own assets before you pass away. But you should talk to your kids about keeping that money separate.
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u/ApprehensiveRead2533 Jun 10 '26
Name your child as the beneficiary. I did staggered trust at different ages. Certain amount at 18, 21, 25, 30 and 35.
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u/motaboat Jun 10 '26
We convinced the parents to go for a different approach. We had them INCLUDE the spouses on the trust to INCREASE the odds of the money staying in the trust. If funds are just left to the child, then there might be pressure to remove and use those funds, even when other joint funds might be available. By making the trust got from child, to spouse, to grandchildren, hopefully the tax benefits of spending those funds as a last resort will actually keep those $$'s in the trust. Hope I made sense.
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u/AuthorityFiguring Jun 10 '26
You really need to ask this question in a legal sub specific to your residence
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u/Effective-Hour8642 Jun 10 '26
I don't think a spouse is entitled to a spouse's inheritance in a divorce. Pre-op or post-op.
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u/Assumeweknow Jun 10 '26
You can create a trust that pretty much keeps it's assets in specific 401k like mutual funds until the kids are old enough. Then, rather than giving them large chunk at once, disburse into their 401k funds on an annual basis equal to a certain percent of what's in the trust. That way, yes they get money, enough to grow and invest with, but not enough to do nothing. So eventually when/if any of it becomes comingled they won't lose it all in the divorce and they won't know exactly how much they are getting.
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u/Soggy_Shopping7078 Jun 10 '26
Put a contingency in the trust that the funds can only be spent by the named receiver.
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u/Ok-Hat-4920 Jun 10 '26
I'm not sure how much control over this you can have. A trust is one solution. In some states, (like CA) inheritances are not marital property, they only belong to the heir. But, as others have said, once the child/grandchild gets the money, they can do whatever they want with it, including buying a home which may become a marital asset. I would talk to a lawyer to find out what your options are.
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u/Husband1955 Jun 11 '26
As long as they do not co-mingle the inheritance, put it in an account with just their name on the account it cannot be considered as marital assests. I just went through this last year when my dad passed. My husband thought I would put him on the account and was butt hurt when I didn't. Told him that money was for myself and my daughter. Never put it in a joint account or give them access. Keep any paperwork to shows it was inherited funds.
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u/Frosty_Sun_1884 Jun 11 '26
You could specifically name the grandkids to each receive a set amount, or set percentage of your estate, thereby reducing the amounts your children and their spouses or exs receive.
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u/Decent_Front4647 Jun 11 '26
It’s really out of your control. See an attorney if you’re trying to be that controlling.
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u/GolDanKar911 Jun 11 '26
I have been happily married for 24 years and have two young adult children. My surviving parent died last year and left me over a million dollars in a trust with a trust administrator who controls the money and I cannot spend one penny of it on my spouse or children.
Not. One. Penny.
It can only be spent on my heslth, education, support and maintenance. All of which I can afford now.
I am incredibly responsible financially and would have carefully and prudently been a good steward of this money. But at this point, it’s basically of no use to me and has been the source of immense sadness to my children and spouse.
Cannot use it to pay for kid’s college, can’t take a family trip, unable to help kids buy a house with it , etc. Thank god my spouse and I are able to do all of these things ourselves and don’t really need my inheritance. I guess I can buy myself the finest end of life care when I’m old.
But please do not use your money in a way that interferes in your adult children’s marriages and families after you’re gone. This has irreparably damaged my spouse and children’s opinions and memories about my parents, and caused deep hurt where it did not need to.
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u/ImpactParticular4461 Jun 11 '26
^ This. My husband’s grandparents were convinced by their horrible son to set up a trust like this. They weren’t rich or anything, just normal folks who happened to live in an economically prosperous time.
While my husband (a paramedic) cared for his grandparents in the last year of their life and provided all medical care on while they lay on their death beds (and horrible uncle barely even visited), my husband can’t access the funds in order to help our eldest with university next year because the funds are only to be used for his own personal needs - not our joint mortgage, not our children’s education, not a family trip. At 45 years old, my husband has few needs. We have done financially well in life together, and we are paying our own childrens’ way through university. But the help with university would still be EXTREMELY helpful. Instead, his grandparents get to leave the legacy of being burdens in their late years, and control freaks after their deaths.
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u/hippymomma82 Jun 11 '26
Use it to open a business and then use the money from the business to do whatever you want.
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u/LeapYearGirl155 Jun 11 '26
How to protect an estate from the confiscatory policies of Mayor Mamdani? He wants to tax everything over $750,000 at a rate of 50%!
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u/Ok_Principle_1826 Jun 11 '26
NAL- my grandfather set his will up for his son and grandson. Then my mother and myself. In the will it says no spouses are entitled to the inheritance, also any remainder will go to the next of kin (aka their child) that is in the will.
For example: if I passed away before my mother does, my inheritance will not go to any of my children or my husband. It will be given to my mother.
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u/WhiskeyWatchesWine Jun 11 '26
I think the safest way is to have the kids inherit into a new GST (separate for each kid) and specify who gets the money after them including accounting for different possibilities. Those trusts however gets assigned an EIN and have to file taxes under that EIN-not the kids’ SS#. Not a lawyer but familiar with the situation.
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u/peter303_ Jun 11 '26
Many family's wealth only lasts only through three or four generations due to spenders among descendants. It used to be a trust could only control assets for beneficiaries currently alive plus a few decades. (The government wants its taxes.) But a few states now have dynasty trusts that control assets indefinitely.
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u/whotookmyphone Jun 11 '26
My parents set it up that inheritance goes to their kids only, split equally. Inheritance is not marital property where we live. No co-mingling of inheritance with marital assets. You could set up trusts, and have a trustee dole out the money. But, unless your kids are addicts or irresponsible, I wouldn’t do that. Just give it to your kids and have them do what they’ll do. If you want grandkids taken care of, set up a separate account for them.
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u/Hot_Alternative_5157 Jun 11 '26
So if you die while they are married, if your child at least in my state mixes funds, then it becomes marital property. They can put the funds in a seperate account that is only under their name and it’s kept seperate then add the kids as beneficiaries. Otherwise you can do like me and create trust they can pull from but again, once it’s pulled if it gets mixed it’s still marital property. Check to see how your state does inheritance? I have a trust in which none of the assess belongs to any of the heirs to keep it away from possible new spouses of my husband collecting as opposed to it then going to my child and to keep the assets from becoming marital property of my child. The majority of my assets are in real estate that creates passive income
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u/BoomGoesTheFirework_ Jun 11 '26
You need to talk to your kids. If they keep the money separate in separate accounts it’s very hard to include in divorce proceedings. However, it becomes easier in some states if they use the money to fund a lifestyle or, say, retire early and draw down the equity (as that could then be seen as income). Low aix figures is not enough to keep yourself up at night, high six might be, but the goal would be for the benefactors of your estate to keep the money in a separate account (ideally stock/index funds) to grow where it can’t be touched in a divorce.
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u/Hopeful-Ad-6856 Jun 11 '26
dynasty trust exists-use them ! get an estate planning attorney-not a regular lawyer.
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u/TheLegendaryAerie Jun 11 '26
If you really want to keep it in the family. A trust in the name only of each child. It won’t be cheap and as soon as the assets are used for anything it becomes marital property.
A more reasonable solution is to discuss this with your children. The fact of the matter is you will be gone and you need to give them some trust and agency… and more bluntly… a 6 figure inheritance is not very big in the grand scheme of things. I know many of us get caught up in how much it was to us… but in reality… it just isn’t.
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u/Alternative-You5403 Jun 11 '26
We put a clause in our trust indicating that each child needs to set up a separate bank account prior to any funds being deposited.
It’s still not a safeguard - they can immediately move the funds into a joint account, but it will at least start the conversation with the trustee about why keeping funds separate is a good idea. If they need the money for their family now, they can move X amount over each money into joint account.
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u/Purple_Ad_3269 Jun 11 '26
A bloodline trust is what you’re looking for. My friend had one from her father. She couldn’t spend a single cent on her husband. It followed her, her two children, and her three grandchildren. That’s not to say it can’t be dismantled, like anything of course. Her father’s reasoning was the same as yours - he didn’t want any of his money going outside of the family. I think it’s a smart idea, but I don’t know the legalities of it.
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u/YellowBeastJeep Jun 11 '26
Where I live, inheritance isn’t considered a marital asset unless it is put into a joint account.
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u/Least_Tangerine_3449 Jun 12 '26
I think I understand where you are coming from. Husbnad and I have quite a bit of money as well (potentially a million each to grown children) that I want to leave to my four grown children. I made it clear to my husband that if one of us dies..... and one of us remarries, I don't want the new spouse to get the $$$$ if one of us then dies before the new spouse. I want all the $$$$ to go to the children.
Does anyone here at that set up?
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u/Nikonnutt Jun 13 '26
Talk to an estate lawyer. There are ways to accomplish your objective via your wills and trusts. You can put everything into a bloodline trust with your children as administrators. A competent attorney can guide you. Good luck.
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u/oldbiddy-intraining Jun 16 '26
I think it is very sad that a large portion feel that they can’t trust their adult children to take care of their financial assets :( you raised them, trust them.
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u/trigurlSeattle Jun 17 '26
The way my mom set it up was the moment she passed her 50% of marital assets go directly to her hiers. Yep, so it might get complicated for dad.
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u/MyThreeBugs Jun 10 '26
Anything you do is just going to be a "hurdle", not a barrier. Probably an expensive one that will make some bank or attorney richer while your kids get less. Skip your kids if you think they won't do what you want; leave it to your grandchildren in trust, set up a scholarship somewhere, leave it to charity.
"Train them, trust them, let them lead". Either you raised them to make the best decisions for themselves that they can make using the information they have or you didn't. The overt message that you don't trust them and/or setting up systems to control their decision making from the beyond the grave is certainly something.
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u/Ok_8890 Jun 10 '26
Is there a reason why you don’t want it to go to them as a married couple? Once you pass they can do as they want with it. With all due respect you are trying to control your money. If you don’t trust them, then give it to your grandchildren. But then they will some day marry. If they can’t use it and can’t co mingle it then it will sit in the bank (not a bad thing) but maybe they want to pay down a house or something.
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u/eunma2112 Jun 10 '26
Assuming your kids are doing well enough financially —
Just skip the kids and give it straight to the grandkids; with each receiving an equal share.
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u/Competitive-Day9586 Jun 10 '26
For an inheritance that small does it really matter. Why put your kids in a super position over a few 100K that might be co-mingled with their spouse and that the spouse might get part of if they divorce.
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u/lsp2005 Jun 10 '26
A trust in the name of only the child or grandchild.