“I love you, but…” Considerations when leaving assets to a loved one.
Valentine’s Day was the time to tell that special person how much you love them. If you’re married, you probably intend to provide for your spouse at your death by leaving everything to them because you love him or her.
Consider this statement — “I love you, Honey, but it may be best if I don’t leave everything outright to you when I die.” This statement seems to be exactly opposite of what most people in a loving relationship would ever say to their spouse or significant other. However, this may just be the best planning that you can do for that person, and even for your children or other loved ones for whom you wish to provide.
If you leave your assets outright to someone at your death, that person has unlimited access to those assets, which means that their creditors, a divorcing spouse, or even a future spouse, also have access to them. You can, instead, designate that the assets you wish to leave to them can be held in a trust for their benefit. This can be done for your spouse, your children, or any other person you care about and wish to leave something for at your death.
In this type of a trust, you would choose a trustee (an individual or corporate trustee) to manage the assets held in the trust and also to make distributions for the benefit of the trust beneficiary (i.e., your spouse, your child or grandchild, or any other person you name). In the trust, you would provide when, and for what reasons, distributions would be made to the trust beneficiary, and at what age/ages, if any, the beneficiary would be able to withdraw assets from his/her trust.
Depending on your choice of trustee and the types of provisions you include in such a trust, you can provide anywhere from a little bit of asset protection, up to a great deal of asset protection, for your loved one, shielding their inheritance from potential creditors, divorcing or future spouses, or any other harmful influences that may occur during their lifetime.
We would be happy to discuss how you can incorporate this type of asset protection into your estate plan. Should you have any questions about family law or would like to schedule a free initial consultation, please contact Waltz, Palmer & Dawson, LLC at (847)253-8800 or contact us online.
Waltz, Palmer & Dawson, LLC is a full-service law firm with various areas of service to assist your business, including: Employment Law, Intellectual Property, Commercial Real Estate, Business Immigration, Litigation and general Business Law services. Individual services include Estate Planning, Wills and Trusts, Probate, Guardianship, Divorce and Family Law.
This article constitutes attorney advertising. The material is for informational purposes only and does not constitute legal advice.