If you are concerned about a married child getting divorced and
the divorce impacting an inheritance consider the following options:
Use of Beneficiary Trusts
Letters of Instruction
Pre/Post Nuptual Agreements
1
Consider a Letter of Instruction
In Pennsylvania, an inheritance does not become marital property. However, the increase in
value of an inheritance does. The simplest solution is therefore to leave a letter of instruction to
your heirs advising them to keep the assets separate from their marital assets and to get a pre nuptual agreement
or a post nup. These approach is problematic because assets are often comingled, and there can be
significant resistance to a post nuptual agreement. For that reason, consider other options below.
2
Consider a Beneficiary Controlled Trust
Generally, if a child receives an inheritance outright, it is not a marital asset subject
to divorce claims. However, that child will be under significant pressure to co mingle the asset
and to make it a marital asset. Furthermore, the growth on such an asset can be claimed. For those reasons, you can leave your child an inheritance in a trust which is largely under their control but which has heightened creditor and divorce protection. Furthermore, when done correctly, the child can be the primary trustee, and the assets can be protected from death taxes in your estate and at the death of your child.
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