| Got son-in-law issues? Read on…
CLIENT QUESTION:
How do we keep our estate away from our son-in-law?
MY RESPONSE:
Assuming your daughter survives you, the only way to guarantee that your son-in-law will never get his hands on your estate is to never give your estate to your daughter in the first place. Here are several scenarios:
1. If your daughter predeceases you, your will would simply say her share passes to her kids or anyone else…anyone but him! This is the easy one.
2. If your daughter survives you, giving any part of your estate to her means she can give it to him, voluntarily or otherwise. If they later divorce, he may or may not be entitled to a percentage, depending on many factors in the state they live. Clearly, if she commingles the money with him (makes joint) or if his actions helped make the money grow (he manages the investment account) he may end up with a claim to the money. On the other hand, if she keeps the money solely in her name and manages it herself, then in most states (if not all), he probably will not get any of it. However, you have no guarantee how all this is going to work out. Once you give the money to your daughter, you have lost all control and now you are just hoping for the best.
3. If your daughter survives you but predeceases her husband, he may be entitled to all or part of her estate. First, she may give it to him in her will. Second, even if she leaves him nothing, she cannot completely disinherit him because he will still have a right to “elect” against her estate, usually giving him a right to 1/3. This is called the “right of election.” Of course, if your daughter has a pre-nuptial agreement, he may have waived his “right of election.” Again, you have no guarantees here of how things will work out.
4. So, if your daughter survives you, the only way to guarantee that your son-in-law will get nothing is to not give it to your daughter in the first place. But that result is unacceptable since you want her to have it. The answer is a FAMILY PROTECTION TRUST. For more information about this trust, check out the next installment of the LISTEN TO LAWRENCE LETTER on Thursday. Wow, a cliffhanger…
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