There are many people who use trusts in their estate plan to distribute their assets and wealth to future generations. However, in doing so, they may not provide the proper protection for an inheritance if the beneficiary goes through a divorce in the future. Continue reading below to learn more about how this is done and contact a New York estate planning attorney for assistance.
Should Distributions be Certain?
The language that is used in an estate plan is extremely important. Usually, using certain language can seem like the best way to accomplish what you need. While in some cases it may be, it can also have unintended consequences for beneficiary distributions. It is important to have the right trust provisions in place. If it appears a beneficiary is certain to receive distributions from a trust, there is a greater chance they can be divided in a divorce. That is why language that looks as if the individual can expect distributions, rather than guaranteeing them, can be beneficial. This can include using phrases such as “may” instead of “shall distribute” or “will be made.”
Naming Multiple Beneficiaries
Another strategy that is used in these situations is naming multiple beneficiaries. Additional beneficiaries that can be named can include subsequent generations. This can help to protect trusts from being divided in a divorce because the assets are intended to be distributed to more than one individual, not just the person going through the divorce.
Consider Alternatives to Direct Distributions
Courts are less inclined to distribute assets from a trust in a divorce if the trust is managed by a trustee. There are many cases in which a trust is written to be distributed at a certain point in a person’s life. This may be when the beneficiary turns a certain age or they get married. However, the money can no longer be protected after it is distributed. Instead of this, beneficiaries can benefit from the protections of a trust if the trustee makes payments on behalf of the beneficiary.
Contact our Firm
The Lauterbach Law Firm is proud to serve clients throughout Rockland County who are faced with legal matters related to estate planning, real estate, foreclosure defense, landlord-tenant law, business law, and criminal defense. If you require the services of an experienced team of attorneys, contact The Lauterbach Law Firm today to schedule a consultation.