You worked hard to create a legacy to leave behind to your children, and you may worry about what happens to what you leave your child if he or she marries, and then that marriage fails. If you have concerns about your adult child potentially losing what you left him or her, you may want to take certain steps when creating your North Carolina estate plan to help ensure that does not happen.
According to Kiplinger, many people who enter into marriages wind up merging their own assets, money and belongings with those of their spouses. However, if that marriage ends in divorce, it creates questions about who gets what. A way to avoid this is to place assets for your adult child into a trust.
How a trust helps
If you create a trust and put only your adult child’s name on it, and not that of his or her husband or wife, you set up something of a safety net in the event of a divorce. The assets placed inside the trust remain the exclusive property of your child, so he or she should not have to split them in the same manner as other assets.
Whether a trust makes sense
Trusts do take some time and thought to create, so it may benefit you to ask yourself certain questions before moving forward with creating one. If your child married recently, know that many marriages remain happy in the beginning only to sour sometime later. If your child’s marriage has lasted quite a while, assess the situation and the state of the marriage to determine if a breakup is likely.
While a trust is often an effective way to shield assets from your child’s ex-spouse in a divorce, they offer many other benefits, too.