How to Keep Inheritance Separate

[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

Again Op, these people are answering and have no idea of what they are talking about. Inheritances are NON MARITAL PROPERTY in BOTH equitable distribution and community property states unless of course you do something to f that up.

[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.

Uh huh. And he can do that with his money not your mommas

[Anonymous]

Anonymous wrote: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.

Do you have estate planning with your spouse? An existing Will or Trust?

If not, keep in separate account with only your name and your kids identified as the beneficiary. Or direct those funds to a trust for the kids. Keep in mind that there may be some elective shares that the spouse can claim. This is jurisdiction dependent and meant to not leave the other spouse destitute.

[Anonymous]

Anonymous wrote:Thank you for all of the great ideas.

Yes, I plan to pay taxes from the inheritance.

It sounds like I should be able to move the inheritance to my brokerage so long as the inheritance is in a separate account with only my name and my kids listed as beneficiaries.

I hadn't thought about a trust. I will look into that. I do not want the kids to get access when they are 18. That is too young, IMO. It sounds like I would need an executor. I have an idea...

The kids are in elementary school. If my partner and I don't save enough to cover college, I would definitely tap the inheritance for that. For now I'd like to keep it more flexible. Who knows what life will bring?

Hopefully I'll live a very long life but I'm planning just in case.

The only way to control distributions is with a trust. You can have the marital and/or survivor's trust for your DH. The inheritance and any other non-marital property in a sep trust for the kids. You can stagger those distributions upon conditions, age, milestones, etc. You can always amend or revoke a living trust.

[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.

Revocable trusts are useless. He needs to consult an estate planner. People here are just going to write what they did which isn’t relevant.

[Anonymous]

OP, I am in a blended family (two kids with my spouse, they have child from previous marriage). I am also in the midst of settling parent's estate and receiving inheritance. We recently did our estate plan. I have two trusts. One is a revocable trust that directs my 401k, my share of our brokerage, and house, to go to spouse if I pass first, and otherwise to our two kids, in a trust if they are under certain ages (have spouse, then family member and then good friend as back up trustees). This is what I would consider our "joint' money. Yes, its possible spouse could remarry and direct these assets elsewhere but I also have a separate trust for inherited assets which go straight to our two kids, and will remain in a trust until they are of determined age, with my family member as trustee. These funds will be in a separate account at the same brokerage spouse and I use. I can draw from it during my lifetime (its revocable) but I know that inherited assets will pass straight to my kids.

Spouse has a trust that directs our 'joint' assets (house, and a brokerage) to go to me but his 401k divided equally between all his kids . I get "less" from him than he would get from me, but I am the only one with a relatively substantial inheritance so I will be fine. while our two kids together will benefit from my inheritance, my stepchild will also be getting large inheritance from their other parent. We cant predict or control enough to make things equal, but we worked hard with our estate attorney to make them fair so that no kid would feel cut out by their bio parent. Again, there's always the possibility that one of us remarries and directs those revocable funds away from children, but we've done a reasonable amount to protect without all the issues of an irrevocable trust.

[Anonymous]

Anonymous wrote:OP, I am in a blended family (two kids with my spouse, they have child from previous marriage). I am also in the midst of settling parent's estate and receiving inheritance. We recently did our estate plan. I have two trusts. One is a revocable trust that directs my 401k, my share of our brokerage, and house, to go to spouse if I pass first, and otherwise to our two kids, in a trust if they are under certain ages (have spouse, then family member and then good friend as back up trustees). This is what I would consider our "joint' money. Yes, its possible spouse could remarry and direct these assets elsewhere but I also have a separate trust for inherited assets which go straight to our two kids, and will remain in a trust until they are of determined age, with my family member as trustee. These funds will be in a separate account at the same brokerage spouse and I use. I can draw from it during my lifetime (its revocable) but I know that inherited assets will pass straight to my kids.

Spouse has a trust that directs our 'joint' assets (house, and a brokerage) to go to me but his 401k divided equally between all his kids . I get "less" from him than he would get from me, but I am the only one with a relatively substantial inheritance so I will be fine. while our two kids together will benefit from my inheritance, my stepchild will also be getting large inheritance from their other parent. We cant predict or control enough to make things equal, but we worked hard with our estate attorney to make them fair so that no kid would feel cut out by their bio parent. Again, there's always the possibility that one of us remarries and directs those revocable funds away from children, but we've done a reasonable amount to protect without all the issues of an irrevocable trust.

We have a hot mess of a blended family in our family. My parents created a special trust for my sibling's share of their estate. My sibling receives an income for life; the remainder goes to my sibling's biological children/my parents' biological grandchildren when they die.

[Anonymous]

Anonymous wrote:

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.

Revocable trusts are useless. He needs to consult an estate planner. People here are just going to write what they did which isn’t relevant.

You don't know what YOU are talking about. They are very useful. But not for everyone. In this situation, however, a trust would be beneficial.