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| KEEPING YOUR MONEY OUT OF YOUR DAUGHTER'S DIVORCE Recognizing that many family's estates are wholly or partially lost when an heir receives an inheritance ... and is, subsequently, divorced, many states now have laws that specify what assets are in the marital estate. In other words, state legislatures have tried to avoid estate loss through heir's divorce. And for these laws, the legislatures are to be commended. However, families should not depend on these laws to protect their heirs. Why? Because many heirs commingle their inherited assets with other assets; thus, allowing the asset to lose its "inherited" character. If, for example, you leave your daughter $100,000.00 and she, subsequently, uses that money as a down payment on a home ... and she and her husband take title jointly, that $100,000.00 has lost its inherited character because the house is a joint asset. While each state's laws and court proceedings are different, one can easily see how inherited property can become joint property. To avoid losing assets to an heir's subsequent divorce, you should consider using an irrevocable trust ... a not-revocable trust into which you can pour the assets. If you name a bank or stockbrokerage trust department as the trustee and if you state in that irrevocable trust that certain benefits can go only to people who are "your issue," you have divorce-proofed the in heritance. A spendthrift trust is the best vehicle for protecting your heirs from losing your money in their divorce. You can set it up now and begin making gifts to it ... and, at death, make a final gift through your will or living revocable trust. Or, you can create the trust now and fund it entirely at your death from your will or from your living revocable trust. |
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