As a parent, you’ve likely spent years building up your savings and assets, hoping to leave a legacy for your children. However, one concern many parents have is ensuring that the inheritance they pass on stays with their child and doesn’t end up going to a child’s spouse. Whether out of love for your children or worrying about future divorces, it’s natural to consider inheritance planning strategies to safeguard your hard-earned assets.

Can a Trust Keep an Inheritance Separate?

A trust is one of the most common and effective ways to ensure that your child is the sole beneficiary of their inheritance. By setting up a trust, you control how and when your assets are distributed.

You can name the trust as the beneficiary of your retirement accounts, life insurance, or other assets. The trustee, a person you designate, will follow your instructions regarding when and how the money or property is given to your child. As long as the money remains in the trust, rather than distributing outright to the child, it will remain protected. Feel free to reach out if you need to discuss this further with one of our experienced estate planning attorneys: Book a Call

Should My Child Get a Prenuptial Agreement?

While prenuptial agreements used to carry a certain stigma, that is no longer the case. These agreements have become more common, especially among younger generations. A prenuptial agreement is signed before marriage and details how a couple’s financial matters will be handled in case of a divorce. In fact, a prenuptial agreement can actually avoid issues related to money during a marriage because it forces a couple to have conversations about the assets they own and how they will handle them during their marriage. This leads to greater trust between spouses and less guessing about the other’s intentions.

If your child is open to the idea, they can use a prenuptial agreement to protect their future inheritance. This legal document can specify which assets belong to your child, preventing a spouse from making any claims.

What if My Child Is Already Married?

If your child is already married, safeguarding their inheritance is still an option. A postnuptial agreement works similarly to a prenuptial agreement but is signed after the wedding. This document can outline which assets, including future inheritances, will remain separate in the event of a divorce.

How Do Estate Planning Professionals Help with Inheritance Planning?

While legal strategies like trusts, prenuptial agreements and postnuptial agreements are essential to inheritance planning, financial tools also play a role. Working with a trusted estate planning professional who provides the legal competence and the knowledge to examine your complete financial background can help you evaluate the best way to structure your assets and accounts to minimize potential risks. They can guide you on which accounts to designate for inheritance and which might be more vulnerable to claims in a divorce.

Take Action to Protect Your Child’s Inheritance

If you’re ready to begin inheritance planning or want to explore how to protect your child’s financial future, we can help. Request a consultation with our estate planning team today to discuss your specific situation and start building a plan that gives you peace of mind.

Key Takeaways:

  • Protect Your Child’s Inheritance: Trusts, prenuptial agreements and postnuptial agreements can help prevent an inheritance from being shared with a spouse.
  • Maintain Control: A trust allows you to control how and when your child receives their inheritance, adding extra layers of protection.
  • Flexible Solutions: Options like prenuptial and postnuptial agreements offer flexibility, even if your child is already married.
  • Consult a Professional: Legal and financial guidance ensures that your inheritance planning is structured effectively, giving you peace of mind.

Frankel Rubin’s attorneys are licensed in Missouri and our law firm services all of the St. Louis Metropolitan Area. We are especially convenient for estate planning in Clayton, Brentwood, Des Peres, Frontenac, Glendale, Webster Groves, Kirkwood, Ladue, Maplewood, Olivette, Overland, Richmond Heights, Rock Hill, Shrewsbury, Town and Country, Creve Coeur, Affton, Crestwood, Sappington, Sunset Hills, Maryland Heights, University City, Warson Woods, and St. Louis City.

Reference: Northwestern Mutual (Apr. 22, 2022) “Can I Leave Money to My Kids But Not Their Spouses?”