Try as we might, we cannot control who our children marry. Though you may make an effort to get along with your children’s spouses, sometimes things do not work out in your favor. You may also worry about what happens to the inheritance you leave for your married child if their marriage dissolves.
The animosity between you and your child’s spouse is cause for concern regarding estate planning. Naturally, if you harbor any ill feelings towards your child’s spouse, you will want to keep them from inheriting any of your money after you pass.
Having a will in place allows you to dictate where your assets will go when you are no longer here. However, that control only extends so far. Your child may decide to share the funds they inherit with their spouse, and their spouse may even have a legal claim to some of the inheritance in some cases. Luckily, there are other steps you can take to prevent your assets from getting into unintended hands.
New York Inheritance Laws
New York is an equitable distribution state. Generally, any directly inherited assets are considered separate from a spouse. If you make it clear that your child is to be the sole beneficiary of the inheritance, their spouse will have little claim to the assets, and the assets will be protected during a divorce. However, if your child takes the money and puts in a joint account with his spouse, or uses the money to pay off a mortgage on a jointly owned properly, or if the Will benefits both the child and his spouse, the inheritance will be considered joint property.
Designating Beneficiaries in a Will
You can stipulate in your will that you want your assets to go to your child only and not their spouse; this is a crucial step to take, as it lets family members know your wishes. You can also designate an executor of your estate in your will. Choosing an executor that you trust ensures your assets will be distributed according to your wishes.
Although you may name your child the sole beneficiary of the inheritance, what they do with that money once they receive it may be out of your control. They may choose to deposit it into a joint savings account; if this is the case, their spouse may have a legal claim to the funds in a divorce.
Similarly, a beneficiary of a property or a large item like an automobile may choose to put their spouse’s name on the title; this merging of assets is known as commingling. Once assets are commingled, it is difficult to claim them as sole property.
Establishing a Trust
Another way to protect your child’s inheritance from their spouse is to establish a trust in their name. Trusts are designed to safeguard assets from complicated probate processes and ensure your assets go where you intend.
By naming your child the sole beneficiary of a trust, their spouse cannot lay claim to the inheritance. Any assets marked for your child in a trust are excluded from divorce proceedings.
A trust requires three parties:
- A grantor
- A trustee to look after the assets
- A beneficiary who will receive an inheritance
As the grantor of the trust, you can name yourself or a third party as trustee, depending on the type of trust. The trustee has control over asset distribution and can use them while they are in their possession. If you create a living trust, you can be your own trustee, affording you more control over your assets.
Once you pass, your child can be their own trustee. But if you fear your child will pass the money along to their spouse, you can name a third party you trust to be the trustee. Choosing a disinterested trustee ensures your assets will be safe from the influence of other family members and will go solely to your child.
What Happens If I Die Without a Will in Place?
Dying without a valid will is known as dying intestate. When you die intestate, the distribution of your assets after death is governed by state law. The first in line to inherit your assets is a surviving spouse, then children. If your child dies before you but has children, the children would take their parent’s place, meaning your grandchildren would inherit your assets if you died without a will.
If you die without a will, there are no limits to what your child can do with their inheritance. They may once again choose to share it with a spouse or commingle the assets. The only way to safeguard your assets from your child’s spouse is to have an experienced estate attorney add stipulations to your will or create a trust where you can safely keep your child’s inheritance.
A thorough estate plan, including a will, is the best way to ensure your assets go where you want them to go. Sverdlov Law, PLLC can help craft an estate plan that allows you to provide funds and direction for your children, ensuring that the assets are protected from unscrupulous spouses! Contact our office for a consultation to discuss the best options for your estate planning needs.