By Nick Montague of Montague Law P.C., L.L.O.
We have all heard the statistics: Half of all marriages end in divorce. While the actual number of marriages that end in divorce is hard to pinpoint, the generally accepted fact is that happily ever after is not always a guarantee. Frequently the clients we counsel are concerned that the once blossoming relationship of their son or daughter-in-law could be headed for divorce court. The question becomes, “How do we protect what we pass on to our children if the in-law becomes the outlaw?” The answer, “through trust-based planning.”
Trust planning is a common estate planning tool for the hardworking individual who wants flexibility during lifetime and asset protection upon passing. When it comes to trust planning, each plan should be tailored to meet the goals of the individual as a holistic planning solution for you and your family.
Fundamentally a properly drafted revocable living trust functions as follows: A trust is set up in your name or the name of your choosing. Your assets become titled into or directed to the trust upon your passing. Throughout your life, you remain trustee of this trust and maintain total control over all your assets and decisions. Following your death, the trust splits into separate trust shares for each one of your children or loved ones. Your child can control the assets inside of their trust and take distributions. Here is the critical part: Your child or loved one will name a distribution co-trustee who cannot be a spouse or a creditor. Thereby, the trust creates a barrier between the assets and the spouse or creditor. In doing so, the assets inside of that trust can be protected in the event of divorce or legal separation.
The co-trustee does not have any right to the assets inside of the trust and is only involved when distributions come out of the trust. You can determine who this person is or leave that up to your child or loved one. The use of the distribution co-trustee can also provide protections from predators and other unforeseen circumstances. In some instances, you may decide that its best to name a financial institution or advising group as co-trustee to ensure your loved ones are getting sound financial advice and solutions. The use of the distribution co-trustee is a critical planning tool that helps protect assets inside of a trust.
Trust planning can also be used to protect a child who does not make sound financial decisions or has a disability. Both situations can be addressed, and you can rest easy knowing their future is secure. Estate planning takes a coordinated team effort between your attorney, financial advisor and other trusted advisors. Working as a team ensures all your needs are met and your ultimate goals will be accomplished upon passing. Proper trust planning provides you and your family flexibility during life and protection of your estate after death if the in-law ever becomes the outlaw.
About Montague Law P.C., L.L.O.: Montague Law P.C., L.L.O. is a firm dedicated to people first. We provide the education and services necessary to reduce stress and confusion when both the unexpected and inevitable happen. We proudly serve Nebraska, Iowa and Missouri and are a member of Wealth Counsel, a premier network of estate planning attorneys throughout the nation.
Foster Group and Montague Law P.C., L.L.O. are unaffiliated entities. Foster Group is registered as an investment adviser and only transacts business in states where it is properly registered, or is excluded or exempted from registration requirements. Registration as an investment adviser does not constitute an endorsement of the firm by securities regulators nor does it indicate that the adviser has attained a particular level of skill or ability. All investment strategies have the potential for profit or loss.
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