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Keeping it all in the family: How to protect your heirs

On Behalf of | Dec 1, 2022 | Firm News

You love your children, and you want your legacy to speak for you even after you’re gone. You have no worries about your children’s capacity to handle the assets you’re leaving behind wisely. 

Building generational wealth is an admirable idea, but you need to be careful about how you do it. If you leave assets outright to your heirs, you’re taking some risks that could eventually dissipate the life you’re trying to create for your family.

Divorces, deaths and disasters can affect an inheritance

Life is very uncertain, and you have no idea what the future will bring for your children once you’re gone. Here are some scenarios to consider:

  • Several years after you die, your son and his wife get a divorce. She gets roughly half of his inheritance, and that money becomes part of her estate. She remarries, dies, and her new spouse inherits everything (including what you left behind).
  • Your daughter passes away while fairly young, leaving behind only her spouse and a minor child. You’d like your grandchild to get your daughter’s full inheritance, but she left her estate to her spouse. When he remarries and has another child, he thinks it’s fairer to divide the money between them.
  • You leave your grandson a considerable inheritance, but he makes a mistake while driving that causes serious injuries to another driver. His entire inheritance is wiped out to pay the judgment against him.

If you want to protect your family’s fortunes against the misfortunes of time, it’s often wisest to consider setting up a trust as part of your estate plans.