Article 13-Estate Planning Series: How Your Family Can Inadvertently be a Threat to Your Estate – Part 3

Written by Wright Law on . Posted in Estate Planning

Last column I explained how second marriages and blended families can be a risk to your estate.  But there are other unfortunate circumstances with which most of us must deal in one form or another.  Common examples are financial difficulties, divorce, addictions and serious health issues.  With planning, your estate can be protected from these complications of life. 

Probably the most common example shared with me is the child who struggles with money.  If your child faces significant creditors, or even bankruptcy, will the money you saved go to pay for his or her financial difficulties?  We all believe (or should believe) that we are responsible to pay for our own obligations.  But does that mean that my money should be used to pay for my child’s choices?  Isn’t there a way my money can be used to help my child (or my child’s children) without turning my money over to his or her creditors?  What if my child must deal with addictions, possible divorce or anything else that jeopardizes my money making it to my child?

Another example is the premature passing of an adult child with minor children.  You may not be comfortable having your child’s share (now passing to your underage grandchildren) controlled by your son or daughter-in-law. 

How about the child who is disabled and unable to make necessary decisions for him or herself.    Simply leaving money to that child can actually harm that child’s interests because he or she is not qualified to handle that money.  Additionally, that money may actually disqualify your child from receiving important disability benefits.   

Again, with proper planning you can ensure your disabled child can qualify to receive a portion of your estate; but in a way that enhances, rather than replaces, current disability benefits. 

There are ways to make sure your money is distributed as you wish, despite the complications of life.  Indeed, the solution need not be overly complex or expensive.  But it will not happen automatically. 

© 2015 Steven J Wright  

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