Would you want the assets you have earned during your life going to your child’s creditor or ex-spouse after your death?
These are difficult subjects to acknowledge, but they can and do happen.
If your inheritance goes directly to a child or loved one (e.g. through a will or trust), those funds become an asset of that child. That in turn exposes the inheritance to being lost to a creditor or split with an ex-spouse.
However, you can protect these funds for your children. You can do this by updating your trust or creating a special type of living trust. Simply put, the trust would say that upon your passing, the inheritance stays in trust for that child. The child would then take a distribution from the trust as needed.
The terms of the trust are critical because that is what allows the inheritance to be protected against that child’s creditor or ex-spouse.