Daughter has a rocky marriage. Mom dies, and leaves $500,000 to daughter. Daughter deposits the inheritance check into the joint savings account she owns with her husband. She didn’t realize it, but she just converted separate property into community property. If she gets divorced, her husband will claim half the inheritance is his.This happens all the time! You can stop it.
Most attorneys write living trusts so children receive mandatory distributions of their inheritance at certain ages, like one-third at age 22, half of what’s left at age 25 and the balance at age 28. It’s called staggered distributions.Staggered distributions are bad. Half of each distribution can go to a divorcing spouse. Why do that?
Staggered distributions are bad. Half of each distribution can go to a divorcing spouse. Why do that?
The solution: Have your attorney write your living trust to include lifetime protection trusts for your children. Each child’s inheritance will stay in trust indefinitely, and at a certain age, your child can take over as trustee of her own trust. If the inheritance remains in trust, it remains protected from a divorcing spouse.