How to Keep Inheritance Separate

[Anonymous]

I've recently inherited $300K. I'd like to keep this separate from marital assets so that it will go to my parent's grandchildren (my children with my spouse), NOT to any potential future spouse of my partner or children of my partner and a future spouse, should I die and my partner remarries and has future children. What do I need to do to keep this inheritance separate other than pay taxes on this amount from this amount? Is it possible to keep this separate if I move it to the brokerage firm with my retirement and current brokerage account are at?

The inheritance is currently at a new to me brokerage firm which has been one bad experience after the other (lack of communication, misinformation, failing to send information they said they would send, making sales without communicating to me in advance, but still sending me lots of info on products they want me to buy). Can I move it to my current brokerage firm but somehow keep it separate? How would I do that? I realize I can ask the brokerage firm. I'm asking here because I don't completely trust big company reps. I've been given enough bad advice/inaccurate info in the past and I realize $300K is a lot to me but a rounding error to these large companies.

[Anonymous]

In order for inheritance to be considered non marital asset, you need to keep it in a separate account in your name only. Name your kids the beneficiaries of that account. One you commingle it with joint assets it becomes marital.

[Anonymous]

You should ask a lawyer, but you can put it in a trust for your kids if you don’t need access to it.

[Anonymous]

You could probably move it to your current broker in a new separate account there. You would have to ask them for a separate statement in case they try to give you a combined statement like fidelity does

[Anonymous]

Don’t pay the taxes on it out of marital money either.

[Anonymous]

Anonymous wrote:You could probably move it to your current broker in a new separate account there. You would have to ask them for a separate statement in case they try to give you a combined statement like fidelity does

But you need to call and ask about that first before you just move the funds

[Anonymous]

Anonymous wrote:You could probably move it to your current broker in a new separate account there. You would have to ask them for a separate statement in case they try to give you a combined statement like fidelity does

It may be easier to just a different brokerage, like Vanguard if you usually use Fidelity, and just put it in index funds.

One problem OP may have is if these aren't retirement accounts, these traders may be doing a bunch n of trades in her taxable account and she may have tax liability if she moves it. Best rip the band aid off right away.

[Anonymous]

I’m not a lawyer but I don’t think you should rely on where you put the account. This is estate planning. What matters is what you write in your will/revocable trust or trust agreement.

[Anonymous]

Anonymous wrote:I’m not a lawyer but I don’t think you should rely on where you put the account. This is estate planning. What matters is what you write in your will/revocable trust or trust agreement.

This is 100% not true!! If she puts it in a joint account with her DH, it will absolutely be 1/2 his in the event of a divorce. She could add her kids as beneficiaries, but that's not a great idea either if they are minors or are young and just waste it.

[Anonymous]

Anonymous wrote:I’m not a lawyer but I don’t think you should rely on where you put the account. This is estate planning. What matters is what you write in your will/revocable trust or trust agreement.

We had the same concerns as OP for our estate. We didn't want the future spouses of our children to get the money. Our estate lawyer said to put everything in our estate with the kids as executors and equal beneficiaries when they reach a certain age.

[Anonymous]

Put it into a vanguard index fund (no more trade fess!) and in a trust if your kids are minors. Let it sit and grow.

[Anonymous]

I think you need a trust, but you can pay an estate lawyer for a consultation to decide. We did one that omits future spouse’s for me and DH and spouses of our kids.

BTW, you’re smart to think about this now.

[Anonymous]

Your current broker can set up a separate account for this money under your name only. I have 7 accounts with my advisor - 1 for me only with inherited money in it, 1 for my inherited IRA that has its own withdraw rules/timeline, 1 for my IRA rolled over from work, one for a joint account with DH, 2 529 accounts. You set the beneficiaries on each account how you want.

[Anonymous]

My state planner advised me to set up a brokerage account solely in my name and to use that for any inheritance money.

[Anonymous]

Open up a new Vanguard account in your name only, put your kids as the beneficiaries. Don't comingle the funds.