How to Keep Inheritance Separate

[Anonymous]

Anonymous wrote:is this person even married?

Most people with family money keep it separate, and yet, they are married. In cases where the family has more than $300k in assets, the money is usually held in a well-drafted trust that would be very difficult to pierce in a divorce.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote: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.

Not wanting the assets to go to the partner's step children seems reasonable, but not wanting the money to go to your partner's future children seems pretty awful.

No mother wants her parents' assets to go to her partner's future children and dilute what is available to her own children. No parent wants their legacy to go to their children's spouses' future children rather than their grandchildren.

It sounds like you are approaching this from the perspective of the poorer spouse rather than that of a donor.

Nope, I am approaching it from the perspective that my partner is going to treat our children exactly the same as their future children, as they are all their children. I also believe my partner will treat their children differently from their step children. That means that even if my inheritance is in a trust for my children, my partner is going to spend money in a way that balances that out, to an extent. I trust my partner to keep the best interest in mind for our children. I have no trust that the future spouse will care about the best interest of my children.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Those two do not know what they are talking about. That is YOUR MONEY. and is not automatically marital property unless the decedent left it to both of you, you both worked on the investments of that money, or you intentionally or unintentionally commingled those funds

Depends on the state. Some states the married couple can have separate assets, and some they cannot

even in community property states like california, inheritances that don't name both partners are sole and separate property *unless commingled in a shared account*


OP, you'll want to open up a separate account in your name only to receive the funds. you *can* use your same brokerage unless you're worried they will not deposit the funds properly.

if that is a concern, then a new brokerage and a low/no fee account-- vanguard or fidelity or chase, what have you.

ultimately you should update your will and set up a trust if you are concerned that the kids might inherit before they are of an age to make responsible choices. of course, then you have to figure out who should be the trustee.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote: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.

Not wanting the assets to go to the partner's step children seems reasonable, but not wanting the money to go to your partner's future children seems pretty awful.

No mother wants her parents' assets to go to her partner's future children and dilute what is available to her own children. No parent wants their legacy to go to their children's spouses' future children rather than their grandchildren.

It sounds like you are approaching this from the perspective of the poorer spouse rather than that of a donor.

Nope, I am approaching it from the perspective that my partner is going to treat our children exactly the same as their future children, as they are all their children. I also believe my partner will treat their children differently from their step children. That means that even if my inheritance is in a trust for my children, my partner is going to spend money in a way that balances that out, to an extent. I trust my partner to keep the best interest in mind for our children. I have no trust that the future spouse will care about the best interest of my children.

That's all fine, but why would you want your parents' money available to your partner to spend at his discretion? My parents' money goes to me, then to my kids. Their estate planning attorney locked it up because it was is parents' wish to leave their money to their kids and grandkids (which is 100% normal). If I die first and my husband has more kids, I doubt he's going to leave more money to his second set of kids when he dies. He'd leave all his kids an equal share of his estate (also, 100% normal). His new kids would inherit from their grandparents and parents. My kids would inherit from their grandparents and parents. Unless he marries someone younger to have another set of kids who also have family money (and let's be real, if you have family money, you're not going to settle for an old guy who already has kids), then his second set of kids will get less overall money than his first set of kids.

[Anonymous]

Anonymous wrote:You can't make it non martial property the only way to do that now is have your spouse sign an agreement post nup. But as of right now the act of inheritance to you and the absents of a prenup already make this marital property.

You are so wrong.

[Anonymous]

I disagree with advice to put it into a trust or 529. It is OP’S money and she should keep it accessible for herself while she is alive. Check state laws OP, but putting it into a separate brokerage and naming the kids beneficiaries seems like the right idea.

[Anonymous]

Anonymous wrote:I disagree with advice to put it into a trust or 529. It is OP’S money and she should keep it accessible for herself while she is alive. Check state laws OP, but putting it into a separate brokerage and naming the kids beneficiaries seems like the right idea.

How much money do the kids have in their 529s? If it’s zero, then setting some aside for college is not a bad idea.

[Anonymous]

Anonymous wrote:How old are your kids? I know no one on here likes Trump, but if your kids are under 18, you can set up Trump accounts for each of them on July 4 and contribute $5k per year. They are the equivalent of a Roth IRA (tax-free growth) without a work requirement. Do that until they are 18. It's a small amount of money, but more than zero. Those are considered "completed gifts" and are therefore shielded from divorce and third-party estate claims.

For the rest, I'd open a separate brokerage account at a different provider than your marital accounts (so if you use Fidelity, switch to Vanguard). Invest it in tax-efficient funds (I personally like VTI and BRK.B), but pay any taxes you owe from the separate funds and keep a record. Don't spend any of the money unless there is a true emergency.

No way. These could go the way of Trump University, Trump Steaks and so on.

[Anonymous]

It’s pretty easy. Set up a separate account and use that account to pay the taxes relating to that account. Never add marital assets to that account. Make your children the beneficiaries of that account. My parents gifted me a large amount a year ago and that is what I did. My husband knows all about the money and he’s cool with it. I can use the money if I want especially for retirement in 20 years.

[Anonymous]

Anonymous wrote:

Anonymous wrote:How old are your kids? I know no one on here likes Trump, but if your kids are under 18, you can set up Trump accounts for each of them on July 4 and contribute $5k per year. They are the equivalent of a Roth IRA (tax-free growth) without a work requirement. Do that until they are 18. It's a small amount of money, but more than zero. Those are considered "completed gifts" and are therefore shielded from divorce and third-party estate claims.

For the rest, I'd open a separate brokerage account at a different provider than your marital accounts (so if you use Fidelity, switch to Vanguard). Invest it in tax-efficient funds (I personally like VTI and BRK.B), but pay any taxes you owe from the separate funds and keep a record. Don't spend any of the money unless there is a true emergency.

No way. These could go the way of Trump University, Trump Steaks and so on.

None of those items is endorsed by the IRS, as in IRS Notice 2025-68. Tax-advantaged accounts, regardless of who initiates them, are beneficial. These accounts let you effectively set up a Roth IRA for your young children and contribute up to $5k per kid per year. As much as I dislike Trump, I'm doing this for my kids. It's more tax advantaged than the UTMAs I previously used to save for their young adult expenses outside of college, like a home downpayment, seed money to start a business, or ideally, even leave the accounts alone and let them grow until retirement, and the balance will be huge if they get 60 years of compound interest. The only downside that I can see to these accounts is that your children get control at 18, and many 18-year-olds are not served by access to large amounts of cash that they didn't earn.

[Anonymous]

You should be able to move everything over “in-kind” to the new brokerage (that is, stocks and bonds held where they are can be moved over as-is, without selling the assets).

Put the account in your name only. For now, set it up as a TOD (transfer on death) to your children.

This does not co-mingle the funds and gives you time to make a longer term plan, if you want to do a trust or something like that.

[Anonymous]

Anonymous wrote:You can't make it non martial property the only way to do that now is have your spouse sign an agreement post nup. But as of right now the act of inheritance to you and the absents of a prenup already make this marital property.

This is literally not true at all. 100% false and you should not post a reply when you don’t know what you are talking about.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote: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.

Not wanting the assets to go to the partner's step children seems reasonable, but not wanting the money to go to your partner's future children seems pretty awful.

No mother wants her parents' assets to go to her partner's future children and dilute what is available to her own children. No parent wants their legacy to go to their children's spouses' future children rather than their grandchildren.

It sounds like you are approaching this from the perspective of the poorer spouse rather than that of a donor.

Nope, I am approaching it from the perspective that my partner is going to treat our children exactly the same as their future children, as they are all their children. I also believe my partner will treat their children differently from their step children. That means that even if my inheritance is in a trust for my children, my partner is going to spend money in a way that balances that out, to an extent. I trust my partner to keep the best interest in mind for our children. I have no trust that the future spouse will care about the best interest of my children.

NP- I've seen this over and over again. Men only care about the children of the woman they're with. Their children often become estranged when they don't like the new stepwife, which later plays into how he writes his will. OR He dies first before the new stepwife and she gets everything, as is usual for wives to inherit the husband's entire estate. Children usually don't get inheritance until both married partners die. And then the stepwife changes her own will so that only her children inherit. This second scenario is how my parent was completely disinherited from even their own grandparent's money. It all went to a step mom and then to her kids.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote: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.

Not wanting the assets to go to the partner's step children seems reasonable, but not wanting the money to go to your partner's future children seems pretty awful.

No mother wants her parents' assets to go to her partner's future children and dilute what is available to her own children. No parent wants their legacy to go to their children's spouses' future children rather than their grandchildren.

It sounds like you are approaching this from the perspective of the poorer spouse rather than that of a donor.

Nope, I am approaching it from the perspective that my partner is going to treat our children exactly the same as their future children, as they are all their children. I also believe my partner will treat their children differently from their step children. That means that even if my inheritance is in a trust for my children, my partner is going to spend money in a way that balances that out, to an extent. I trust my partner to keep the best interest in mind for our children. I have no trust that the future spouse will care about the best interest of my children.

NP- I've seen this over and over again. Men only care about the children of the woman they're with. Their children often become estranged when they don't like the new stepwife, which later plays into how he writes his will. OR He dies first before the new stepwife and she gets everything, as is usual for wives to inherit the husband's entire estate. Children usually don't get inheritance until both married partners die. And then the stepwife changes her own will so that only her children inherit. This second scenario is how my parent was completely disinherited from even their own grandparent's money. It all went to a step mom and then to her kids.

Yep. It’s common enough that it makes sense for the op to set things up so her kids inherit this money directly, should something happen to her. Hopefully it will never be an issue, but better safe than sorry.

[Anonymous]

How old are the kids op?