If there is only 2 daughters, BOTH daughters are the heirs if there is no will. Even the incarcerated daughter is entitled to her inheritance. Certainly setting up a trust for her benefit is a good idea. At a minimum, the money should be placed in an account for her benefit. The bottom line is whether she is in jail for life or not, she is a heir and entitled to her inheritance. Keep in mind however, if restitution is ordered in her criminal case, the inheritance can be used to satisfy that restitution order.
This is a wills and trust issue. I would suggest contacting a wills and trust attorney. Many wills and trusts attorneys provided a free consultation.
The response above is not intended as legal advice since it’s impracticable to provide thorough, accurate advice based upon the query without additional details. It is highly recommended that one should seek advice from a criminal defense attorney licensed in your jurisdiction by setting up a confidential meeting. Moreover, this response does not constitute the creation of an attorney-client relationship since this message is not a confidential communication because it was posted on a public website, thereby publicly disclosing the information, which is another reason to setup a confidential meeting with an attorney.
This question should be sent to the probate section. A good probate (wills and trusts) attorney will be able to know this answer and advise you.
The information provided herein does not create an attorney-client relationship. The information provided is to suggerst some general principles and should not be relied upon for client decisions. Only upon the hiring of counsel can such advice be custom-tailored to the client's specific situation and needs.