Estate Plan to Protect Your Child From the Other Parent
Adult and Children Hands Holding Home.
In considering an estate plan, an important issue for parents is taking care of their children. Single parents often worry about who will provide for their child if they suddenly pass away. As a result, many parents make an estate plan to make sure their child is taken care of. A parent can also specify what happens to their property, jewelry, and other valuable items.
What happens if you do not trust the other parent to oversee the child’s inheritance? There are ways for a single parent to structure an estate plan to make sure their child has everything they need.
Trusts as Estate Plan
One way to protect your child’s inheritance from their other parent is to create a trust. Legally, a trust involves three parties:
- The person who creates the trust (trustmaker)
- Individual who will benefit from the trust (beneficiary)
- The person who will hold the trust assets for the benefit of the beneficiary (trustee)
When you create a trust, you can choose anyone you want to be trustee. Even if the trust is for your child, you do not have to make the other parent the trustee. You can choose a close family member, friend, or an attorney, like an estate planning firm trusts, to oversee the trust and make sure your child’s needs are taken care of.
Legal Entities As Estate Plan
A family limited partnership or a limited liability company (LLC) can also protect your child’s inheritance. The partnership or LLC’s operating agreement places limits on transfers of ownership interests, real estate, and other assets. An estate planning attorney can advise you if this option works for your situation.
Adult Children
You can also have control over your estate with adult children. Are you concerned that the person your child has chosen for a spouse is not financially responsible? Parents are also concerned an inheritance will end up becoming part of a divorce settlement.
One of the best ways to ensure that doesn’t happen is to set up a lifetime trust. This trust prevents assets from becoming part of a marital estate and not an asset for a divorce settlement. You can name a trustee who will maintain control over the trust and it will be up to their discretion to approve any withdrawals of assets.
For more information about creating a trust, or to speak with an attorney who may help you create a trust for your child, contact a lawyer.
Lisa Derr
Lisa Derr is an experienced Divorce and Family Mediator with three offices in east central Wisconsin. She started the family mediation practice in 1995. Lisa earned her BA in psychology from the University of Wisconsin in 1984 in four years despite a serious car accident that involved a 2-month hospital stay. She began practicing law in 1987. For the first 8 years of her career, Lisa litigated personal injury and divorce cases. But she was frustrated with the tremendous financial and emotional cost of divorce trials. Contested hearings inhibited reconciliation and healing for thewhole family. She started the Beaver Dam divorce mediation practice in 1995 and with her partner, Cassel Villarreal, expanded to Oshkosh and West Bend ten years later.