ESTATE PLANNING: Planning around a child's spouse

2013-04-13T13:30:00Z ESTATE PLANNING: Planning around a child's spouseChristopher W. Yugo Times Business Columnist nwitimes.com
April 13, 2013 1:30 pm  • 

Q: We have three children all of whom are married. One of our son's wives is nice, but we aren't sure that we trust her. How do we make sure she stays out of our estate plan? Is there anything we can do to make sure she doesn't inherit our property?

A: Over the years, I've seen family discourse in estate settlements a handful of times. It just doesn't happen all that often. It's been my experience that the family bonds tend to win out.

In the few cases that I have seen siblings fighting, I've often suspected a spouse was stirring things up. Maybe I'm wrong, but I think that the lack of family bonds sometimes frees up a daughter or son-in-law to remind us that "forgive and forget" isn't always the best way to handle things.

In any case, you shouldn't be concerned that a child's spouse will inherit your property. At least not directly from you.

A child's spouse isn't a blood relative and therefore doesn't fit into the traditional inheritance formula. Unless you specifically include a child's spouse in your estate plan, he or she doesn't have a legal right to inherit your property. If your child dies and you haven't planned for that contingency, his or her children are normally the next in line to inherit your property – not the spouse.

Now having said that, if a married child inherits your property, his or her spouse is a likely heir of his or her estate. So I guess in a roundabout way, your property could end of in the spouse's hands. It just wouldn't come through your estate plan.

If the thought that the unworthy in-law could receive your property in even a roundabout way still worries you, the best thing to do is keep the inheritance out of the child's hands entirely. You could leave your child's inheritance to an irrevocable trust for his benefit. The trustee could provide your child with support, but you could ultimately designate the remainder beneficiary.

Also, remember that even if you avoid the spouse in your estate plan, he or she could manage an inheritance left to a minor grandchild. If that also bothers you, you should consider using a minor's trust and appointing a trustee other than the spouse. What you want to avoid is leaving the money directly to a minor grandchild because that could result in a guardianship and the obvious person to serve as a guardian is a parent.

Christopher W. Yugo is an attorney in Crown Point. Address questions to Chris in care of The Times, 601 W. 45th Ave., Munster, IN 46321 or to Chrisyugolaw@gmail.com. Yugo’s information is meant to be general in nature. Specific legal, tax, or insurance questions should be referred to your attorney, accountant, or estate-planning specialist.

Copyright 2014 nwitimes.com. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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