Do you know what the future will be for the people you will leave your estate to? I don’t intend that to be a rhetorical question, but we can all agree we don’t know the future for our loved ones. They could continue to live fulfilling lives. Or, they could experience (through no fault of their own) a very difficult stage of their life. It could be a traumatic car accident. It could be an illness that is not covered by health insurance. It could be a business failure due to an unexpected reversal in the economy. It could be a divorce.
All of these events almost inevitably lead to financial distress for the loved one and their family. When you leave an inheritance to a loved one (and it is distributed to them in their own name), this exposes the money to a creditor or ex-spouse of that loved one. This happens because the money becomes the loved one’s “own” asset and from a legal standpoint, is then subject to the claims of a creditor or an ex-spouse in a divorce.
There is a way to avoid this. By including certain provisions in your estate plan, you can avoid having an inheritance go to someone who you don’t know or even worse to a person who is no longer married to your loved one. If you are interested in this type of planning, feel free to contact me at your convenience.
