presented by: Bradford & Holliman, Estate Planning
Parents frequently ask us how they can leave their assets to their children when they die without those assets being vulnerable to a child later divorcing or having problems with debt. The sentiments expressed by the parents are almost always the same: “We want our child to have our assets, we do not want an ex-spouse or creditor to have our assets.”
The typical Last Will and Testament that leaves everything to the child or percentages to children cannot provide this kind of protection because once the assets become the property of a child, they become subject to the laws governing divorce or other debt collection. However, parents can create trusts to hold the assets they leave for children that will protect the assets from divorce or other creditors. These trusts can be set up to provide assets to a child as needed. Since the assets are not placed into the child’s name, the assets do not become the property of the child which would be subject to division or seizure. Of course, not all trusts can accomplish this goal. The trust must contain the right provisions and restrictions to accomplish asset protection for a child.
Parents may choose to use a Last Will and Testament that has the proper trust provisions inside the Will; or, they may choose to use a Revocable Living Trust that completely avoids the probate court process at death while providing protection for the heirs. If you wish to provide protection for children or other heirs, talk with your estate planning attorney to determine the best way to achieve your specific goals.
–Melanie Bradford Holliman
Partner, Bradford & Holliman, LLC
Practice focuses on estate planning, elder law and special needs trust.
2491 Pelham Parkway, Pelham, Ala. 35124
This article is for educational purposes and is not intended for specific legal advice.