Protecting your Children’s Inheritance

The wealth your children inherit from you may be lost to their creditors, lawsuits, divorces, or bankruptcies without proper planning

When you die leaving your wealth to your spouse or children, you have the option to protect their inheritance from their creditors. In our litigious society it is a mistake to depend too heavily on insurance for protection. There are many policy exclusions and judgments can exceed policy limits.

Also, there are many types of lawsuits that are not covered by insurance, such as mortgage indebtedness, breach of contract, bankruptcy, divorce, and any accusation of an intentional tort such as libel or slander.

First steps and initial meeting preparation.

Realistically assess the vulnerability of your family to outsider attacks on their wealth. With respect to each spouse, child or other loved one, consider:

  • Their marital status. Are they now married or may they marry in the future?
  • Their profession. Some professions such as law or medicine are more vulnerable to lawsuits than others.
  • Their own personal history. Some children are not as careful as others about debt, investments and business ventures. Are they spendthrifts, do they have substance abuse issues?
  • If they were wiped out in a catastrophic lawsuit would they be able to replace the wealth in a reasonable amount of time through their own work?

NOTE: A living trust by itself does NOT protect your own assets from your creditors. The protection we are speaking of here comes into play when you leave your assets to another. There are asset protection trusts for your own assets but that is not the subject of this discussion.

Call our office for a consultation. 847-674-0200. The fee for the initial consultation is $450. It typically takes about 1 to 1 ½ hours. The $450 fee is waived if you decide to go forward with your planning. The fee for the planning will depend on what you need and will be quoted at the consultation. It will be a fixed fee, not an hourly rate.