Estate Plans With In-Law Protection

In recent years, there has been a sharp increase in the number of clients wanting to secure their inheritance across two generations, mainly to make sure that their estate does not eventually end up in the hands of a son-in-law or daughter-in-law after they have passed on. By protecting each child’s inheritance in an Asset Management Trust (which we’ve sometimes called Beneficiary Trusts), it can make sure that those assets must go to the grandchildren or the other children when that child passes on. Basically, they don’t want to leave an inheritance to their child that will 1) have the inheritance “co-mingled” with their child’s spouse, and then half of it be lost in a divorce, or 2) the child later passes on leaving it to their spouse, and then their money goes to their son-in-law’s/daughter-in-law’s next spouse and the step-kids rather than their own descendants.

However, this kind of in-law protection planning also comes with other protections for the next generation that has nothing to do with potential divorces or remarriages. The other protections include:

  • Protection against creditors and bankruptcy for the life of the beneficiary;
  • Protection against lawsuits for the life of the beneficiary; and
  • Protection against losing or being denied benefits for disability and/or Medicaid programs that examine whether or not the beneficiary has “too much” in assets to qualify.

Children grow up and become adults, and they have to make their own decisions and live with the consequences. The same does not have to be true of an inheritance you leave them. It is possible to secure that legacy so anything left must go to your own descendants, and not be lost to creditors, lawsuits, disability / Medicaid spenddowns, or divorcing spouses.

For more information on In-Law Protection Planning, please check out the free webinar at www.inlawplanningwebinar.com.