Parents always work to protect their children, nurture them, and help them to build the best possible future. This does not stop simply because a child grows up and starts his or her own family. One of the main goals of estate planning for many people is to leave financial resources to their adult children. While in the optimal situation, your adult child and his or her spouse will have a lasting and wonderful marriage, the reality is that divorce is not an uncommon occurrence. Minnesota is what is called an equitable distribution state. This means that all marital assets will be equitably divided if your adult child and his or her spouse get a divorce. In some circumstances, this could mean that money you have left to your child could end up being divided in a divorce. There are important estate planning techniques to keep in mind to make sure that any money you provide to your adult child does not end up being also left to his or her spouse.
The most important issue to keep in mind is that simply leaving your child a large lump sum of cash in a will or gifting the money outright is the easiest way to make sure that the funds will end up getting divided in a divorce. Unless your adult child takes very specific actions, the money will likely end up becoming marital property. The spouse will have access to the funds and the funds would be divided in the event of divorce.
One of the most sure-fire ways to ensure that the money is left only to your adult child is to create a trust. With a trust, you will transfer the funds to the trust. The trustee will be responsible for making distributions from the trust in accordance with the instructions contained in the trust documents. The property contained in the trust will not be divided in a divorce because the property belongs to the trust, not to your adult child. Note that any distributions that have been made to the adult child may very well be properly divided.
Call us today at (320) 299-4249 and let us help you. We have many options for how to make sure your adult child is provided for without forfeiting assets in a divorce.
