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How to Protect Your Heirs from Divorce

Written by: David M. Frees III

Reputation Level 9

Divorce Divorce & Children Estate Planning

Posted over 3 years ago. Applies to Pennsylvania, 0 helpful votes, 0 comments

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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 prenuptial agreement or a post-nup. These approach is problematic because assets are often co-mingled, and there can be significant resistance to a post-nuptial agreement. For that reason, consider other options below.

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.