If the world was perfect, marriage would last forever. Unfortunately, many marriages end in divorce. The UK alone has a divorce rate of 42%. In light of this statistic, we must ask how you can ensure that your children’s and grandchildren’s inheritance is protected from divorce.
The Impact of Divorce on Inheritance
As part of your estate plan, you may have designated your children as beneficiaries so they will inherit your assets and pass them on to your grandchildren; we call this bloodline planning. However, what happens if your child gets divorced? The assets they inherited from you may be divided with their ex-spouse in most cases, meaning a portion of your hard-earned money ends up in their hands. Even worst, should they remarry and have children, your grandchildren could be disinherited in favour of the younger children with the new partner.
The Importance of Trusts in Estate Planning
One of the ways that you may safeguard your child’s inheritance from the financial turmoil of a failed marriage is by creating a Discretionary Trust within your Will. This will go a long way in ensuring that all your assets are protected and distributed according to your preference, regardless of future personal circumstances of the beneficiaries which may occur. Below is how a trust can help:
- Authority over Sharing Assets: By having your property under a Discretionary trust, you can state when and how your children should inherit it. It helps avoid treating these assets like marital assets before they are divided during divorce.
- Protection against Divorce Claims: Assets kept within a trust do not normally form part of the marital estate and thus cannot be touched by an ex-spouse who may want to obtain something out of them once divorced for example. Thus, what you leave behind for your children and grandchildren remains intact.
- Maintaining Family Prosperity: Your wealth would remain within the family as you intended through helping support your grandchildren and also children until death occurs or otherwise depending on each case. Therefore, this perpetual safeguarding acknowledges one’s heritage.
- Executors / Trustees can decide whether or not to distribute assets in certain circumstances for the long term protection of the beneficiaries who may be vulnerable.
Key Factors to Consider When Planning Your Estate
When planning one’s estate, it is important to understand how marriage and divorce can affect one’s “Will” and asset distribution including:
Wills and Marriage: Any Will written before marriage is automatically void upon entering into a marriage. If you want your Will to be enforceable even after you get married, you will have to draft it in contemplation of marriage.
Wills and Divorce: Your Will does not automatically become void on divorce as many people believe. It is important to review and possibly amend your Will following a divorce or permanent separation so that it can reflect your current desires.
Taking Action
You can try and stop your children from suffering emotionally when they experience divorce; but you cannot do the same for the financial impact that follows the separation. By creating a Trust as part of an estate planning strategy, you can take preventive measures by protecting what belongs to you and thus ensuring its equitable distribution which stays within your bloodline.
For more information on how Bispham Legal Services can help safeguard your Final Will & testamentary arrangements from divorce while securing your children’s inheritance, contact us today. Our knowledgeable team will assist in setting up a trust with best practices hence ensuring the safety and stability of any estate planning program designed for our clients.
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