Many estate plans leave the decedent's assets outright to their children, typically with the focus on avoiding the Florida probate process. But when you leave your assets to your children, will their spouse be able to take it away in the event of a divorce? The short answer is maybe. Each state is different in this, but when assets are inherited by a child, the assets typically do not become part of the marital estate. But this does not mean that your child is protected. The best way to plan for your children’s inheritance is to set up a Personal Asset Trust® (a “PAT”) which allows your heir(s) to use and benefit from the Trust’s assets for their lifetime(s). This type of trust is the best of all worlds: the heirs can use the trust funds as needed and desired, but the money is protected and cannot be taken away in the event of a divorce, a lawsuit, or bankruptcy, or if they ever had to be in the nursing home.
The Personal Asset Trust®, a relatively new legal concept, is based upon over 100 years of asset protection law. The Personal Asset Trust® is so unique that only a small number of attorneys throughout the country offer it—those who have taken the time to study and integrate it into their practices, like our law firm. A Personal Asset Trust® includes the following provisions:
- Heirs manage the trust assets during their lifetimes; i.e., they serve as trustees of their own trusts—this simplifies trust administration
- Heirs are free to decide the use of the money, without outside intervention or control; Monies held within the trust are generally exempt from creditor claims;
- Monies held within the trust are not considered “marital assets,” and are not subject to divorce claims or consideration during divorce proceedings;
- Assets in a Personal Asset Account are not considered “countable” in calculating the asset limitation for Medicaid nursing home eligibility.
- Heirs are able to make necessary changes to the Personal Asset Trust® to accommodate health, financial, or marital status changes.
- We typically create a Personal Asset Trust in your own Revocable Living Trust.
Thus, the Personal Asset Trust® protects your (and your heirs’) assets from “outsiders,” provides your heirs with optimal freedom of use, and offers administrative flexibility for your direct heirs and future generations.
Our law firm is one of the few in the Pinellas County area that regularly uses the PAT in their estate planning documents. If you want to protect your children the best way possible, we would be glad to meet with your to discuss your estate plan.
If you want to help make sure your children are protected upon your death so you are not making your ex-in-law wealthy, you will want to use our law firm to help you.
