Protecting an Inheritance from a Family Law Claim
Ensure that the inheritance you leave does where you want it to.
You may have made a Will and think that you have done all you can to provide for your children after your death. But what happens if one of those children divorce?
Many people don’t know that their children’s divorce can affect their Estate Planning.
An inheritance (actual or expected) is a consideration when spouses divorce. This is because it can form part of the pool of matrimonial assets.
However, it is possible to reduce the impact of a child’s divorce by using a Testamentary Trust.
The Family Court may characterise an inheritance as either:
a. an asset of the marriage. It becomes part of the matrimonial property pool. And as such can be divided between the divorcing spouses in a manner deemed by the Court to be just and equitable; or
b. a financial resource. Meaning it cannot be divided between the parties. Although the court will consider if there needs to be an adjustment to the division of assets. This possible adjustment is because one party has the benefit of the financial resource.
The creation of a Testamentary Trust separates the legal and beneficial ownership of assets. And this mayprotect a beneficiary’s inheritance from Family Law proceedings.
The Court will characterise an interest in a Testamentary Trust. How they do this depends upon several factors which include control and independence.
Unfortunately, life does not always go as we plan. Divorce is common. If you want to protect an inheritance from a future Family Law claim, please seek advice. A Testamentary Trust may be your best path forward. Please contact us for further advice.
“A Testamentary Trust is a useful tool for protecting your children’s inheritance.Alison Hiscocks