Revocable Living Trusts
Things change. My clients want what’s best for their families, but sometimes a child ends up in a shaky marriage. Unfortunately, they may be blind to what their parents’ more experienced, objective eyes may see. And now, my clients just know that if they left their child an inheritance that the spouse would find a way to get their hands on it. Or worse, if anything happens to their child, they just know the untrusted spouse would inherit my client’s assets through their deceased child, be remarried within a year, and now my clients’ hard-earned savings are being left to their son-in-law/daughter-in-law’s next spouse and the stepkids rather than their own grandchildren.
This happens a lot more often than we would like to think.
Fortunately, there are specific planning steps to protect an estate and ensure the trust estate eventually goes to the grandchildren rather than their child’s spouse (and then the second husband/wife’s children). If instead of setting up your revocable living trust to leave your assets directly to your child, they can be left in trust for the child’s lifetime and then mandatorily have to go to the grandchildren when the child passes on. The trustee can pay for family vacations, provide funds for education for the grandchildren, and even purchase assets in the name of the trust for the child’s use, such as a house. If there is a divorce, there is no way for the soon-to-be-ex-spouse to get to the trust assets. In addition, this planning also protects the trust assets from being lost from lawsuits, creditors, and even ensures that the assets are not counted against disability benefits or Medicaid for the child, nor would they show up as parental assets for college financial aid applications for the grandchildren.
Because this is such an important topic, I have created a specific video around this type of planning available by clicking here.