A client recently asked me, “Is there anything that can be done now to protect my daughter and grandchildren’s inheritances?” Happily, I was able to explain that there are two tools available to safeguard the client’s legacy for her loved ones. These tools are prenuptial agreements and lifetime trust shares, which allow people to protect their wealth and ensure that their hard-earned assets are preserved for future generations.
If your adult child is not yet married, the best way to protect an inheritance is to execute a prenuptial agreement. A prenuptial agreement is a legally binding contract that is completed prior to marriage. It outlines the assets and rights of each person in the event of divorce or death which will supersede state law so long as the prenuptial agreement is determined to be valid. The prenuptial agreement can “carve out” assets, such as potential inheritances and gifts from parents, which will remain with your child in the event of a divorce instead of being divided between your child and the divorcing spouse. Your child and fiancé must each be represented by separate attorneys to provide advice and negotiate the prenuptial agreement. The prenuptial agreement should be started at least six to nine months prior to the date of the marriage ceremony.
In addition to your child executing a prenuptial agreement, you can take action by creating an estate plan that includes a lifetime trust share for your child. You can prepare a Trust now that upon your passing will hold and manage assets for your child for that child’s lifetime, or even for the lifetime of a child’s descendants (your grandchildren). Although your child (and grandchildren) can benefit from the funds held in the trust share during their lifetime according to the terms that you put in place, the assets are not as vulnerable to division between your child and a divorcing spouse because your child does not have total ownership and control of the assets.
To best preserve family wealth for multiple generations, your child should execute a prenuptial agreement and you should create an estate plan containing a lifetime trust share for your child. At Samuel, Sayward & Baler LLC, we strive to provide you with the peace of mind that you are taking all the steps necessary to afford your family financial security and stability, and protect your legacy for generations to come.
Attorney Abigail V. Poole is a senior associate attorney with the Dedham firm of Samuel, Sayward & Baler LLC which focuses on advising its clients in the areas of trust and estate planning, estate settlement and elder law matters. She is an active member and current President of the Massachusetts Chapter of the National Academy of Elder Law Attorneys (NAELA). This article is not intended to provide legal advice or create or imply an attorney-client relationship. No information contained herein is a substitute for a personal consultation with an attorney. For more information visit ssbllc.com or call 781/461-1020.
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