When thinking about assets and their estate plan, most people focus on who they want to receive the assets at death. And that is an important question to consider. Everyone should know who they want to receive their assets, and everyone should take steps to make sure the assets will reach them. But if we stop there, some unexpected and unfortunate outcomes may occur. Instead, we should consider some tough questions that may prompt more thorough planning.

What If Your Surviving Spouse Remarries or Finds a “Friend”: Will Your Assets and Family Be Protected?

It’s common for married couples, especially those couples who have enjoyed a long marriage, to say they want their spouse to receive all of their assets. Often, the beneficiary designations on retirement accounts and life insurance policies mirror this idea. One spouse is named as the beneficiary for the other. The end result will be that the surviving spouse owns and controls all of the property the couple accumulated.

The surviving spouse as the sole beneficiary may work out well. They may be a thoughtful, caring steward of the property. And perhaps the surviving spouse will only use the property for their needs and the needs of the couple’s children and grandchildren. But what if, unsuspectingly, the surviving spouse meets someone, and a relationship grows. This relationship could blossom into marriage or a deep “friendship.” How does the new relationship affect our estate planning perspective? Usually, it makes a big difference.

Because of the enormous impact a marriage or deep friendship could have on a surviving spouse’s perspective and use of the property, most people want their estate plan to protect what they leave behind. The protections will not deprive the surviving spouse of anything. The surviving spouse will benefit from the assets and have access to the assets for their needs. But the protections will limit the ability of the new spouse or “friend” to take the property for themselves. The end result is that the assets won’t be lost to this new spouse or friend, and the surviving spouse will benefit from the assets as intended.

What If Your Children Get Divorced or Die Much Younger Than You Expect: Do You Want Their Inheritance To Stay In The Family?

When considering where their assets should go upon the death of the surviving spouse, most people with children want the assets to go to them. That makes sense. We want our children to benefit from our efforts. But what if your child gets divorced: will the inheritance be at risk in the divorce? Or what if your child dies much younger than you expect: will the inheritance you left to your child benefit your grandchildren or will it, instead, go to your child’s surviving spouse.

The law tries to protect an inheritance in the event of divorce. Rather than being treated as marital property to be split, an inheritance should be treated as non-marital property of the person who inherited it. But does it always work that way? No. That’s why it is wise to protect the inheritance from the risk of a child’s divorce. You can plan your estate so that your child benefits without losing the inheritance if the child divorces.

Even if the child doesn’t divorce, the inheritance could still end up in the hands of their surviving spouse. This happens when the child dies younger than we expect, and their own estate plan directed all of their assets to their surviving spouse. As we mentioned above, a surviving spouse may find a new spouse or “friend” whose intentions are not pure and who may want to get a piece of the inheritance. To avoid this risk, you can add protections into your estate plan so that your property stays in the family and benefits those in the family who you want to benefit: your surviving spouse, children, and grandchildren.

How Do You Protect Your Assets For Those You Love?

There are estate-planning tools that we can use to protect your assets from the risks mentioned. The most simple and effective one is a trust. Although some people may think of a trust as a one-size-fits-all concept, it is not. A trust is infinitely flexible. We can tailor it to meet your own unique needs and concerns. And through the trust, we can protect your assets for your surviving spouse so that benefits flow to them without losing all the assets to a new spouse or “friend.” And we can use a trust to protect the assets from a child’s potential divorce or their untimely death. That way, the assets stay in the family and benefit your children and grandchildren the way you want. Contact me to explore this and other ways to make sure your property will pass to those you want. We don’t want to see your property lost to others who may not care for your family the way you do.