Fort Worth estate attorneys know that it’s not inherently bad if your son-in-law or daughter-in-law receives your child’s inheritance. After all, he or she is part of the family. Ideally, if an in-law ends up with the family’s money (say your adult child passes away first), it’s always the hope that the in-law will pass down whatever is left to your grandchildren down the road.
But in reality, nothing is certain. With multiple marriages, divorces, blended families and stepchildren, there is no guarantee that your child’s spouse will leave your family’s money to your grandchildren. Your son or daughter-in-law may not even have the option to leave the money to your grandkids—say in the case of remarriage where the new spouse is entitled to all or part of the assets of the spouse instead of the kids from a previous relationship (i.e., your grandkids).
Cases for unintended beneficiaries are very common in today’s world. Once you recognize this risk, you have the chance to do some advance inheritance planning to prevent this from becoming a reality. It starts by understanding the three ways that your family’s wealth could be lost.
1. Through Inheritance
Perhaps your daughter has a will leaving everything she owns, including her inherited assets, to her husband. So, if she dies first, your son-in-law will own everything. This is extremely common among young couples.
2. Through Divorce
In the event of a divorce, your child’s spouse may, by law, acquire some rights in your child’s inheritance. While marital property laws vary depending on the state you live in, the following risk will still be present- that your child’s spouse will end up with the family money and divert it from your bloodline.
3. Through Remarriage
In the event your son or daughter dies and the spouse remarries, the new spouse will stand to inherit the assets that were given to your in-law (that were once yours) without having to share any with your grandkids. This is more than just a “Cinderella” scenario…it’s actually a common estate planning problem that many blended families encounter.
One of the most effective ways to ensure that family money is left only to your children (or grandchildren) is to create a trust. Instead of leaving an inheritance outright to your adult child, you will transfer your assets to the trust. You can make the transfer right now (possibly with tax benefits) or leave the assets to the trust in your will. A trustee of your choosing will then be responsible for making distributions from the trust in accordance with your wishes and instructions. The assets contained in the trust will not be divided in a divorce because the property belongs to the trust, not to your adult child. And, you can stipulate that if something happens to your adult child, your grandkids can inherit the remaining assets, rather than an in-law.
Our Fort Worth estate attorneys can provide you with many options to help ensure that your children and grandchildren are properly provided for without the risk of losing the family wealth in a divorce or through subsequent marriages. Just call our law firm at (817) 752-3307 to set up a free consultation to get started.