Use the correct estate planning tools
An estate plan can protect your legacy and control how it will be transferred to your loved ones. It is possible to shield your child’s inheritance through strategic estate planning methods. The most effective estate planning tool for this purpose is a trust.
A revocable living trust is beneficial because while your child can take money from the trust, they are not technically the owner of it. You can assign a trustee to distribute money to your child without ever having it in your child’s name. This means that the money would be protected from asset division in divorce as long as it remains in the trust.
You may also establish spending guidelines for your loved ones. You may advise how to distribute inheritance funds in order to protect them. Trust fund money spent on community expenses, such as mortgage payments, is considered a gift. Once a spouse makes payments using inheritance towards that mortgage, it becomes community property. In case of divorce, your child would not get the money back. An estate planning attorney can help you put together an effective plan with clear guidelines to best protect your family’s legacy.
