Estate Planning for Real Life Families: What If I Don’t Trust My Child’s Spouse?

Sep 18

It may feel uncomfortable to say out loud, but it is one of the questions that comes up regularly during estate planning meetings:

What if I want to leave an inheritance to my child, but I don't trust their spouse?

You love your child. You want to provide for them. You may even like their spouse.

But you have spent a lifetime building your savings, investments, business, home, or other assets, and you are not necessarily comfortable with the possibility that those assets could someday end up benefiting someone you never intended to inherit them.

That does not make you pessimistic. It means you are thinking beyond what your family looks like today.

Divorce happens. Financial problems happen. Lawsuits happen. Relationships change. And an estate plan you create today may not come into play for another 10, 20, or 30 years.

Fortunately, your choices are not limited to leaving everything directly to your child or leaving them nothing at all.

Isn't an Inheritance Already Separate Property?

In Illinois, property acquired by gift, legacy, or inheritance is generally considered non-marital property.

That provides an important starting point, but it does not necessarily mean an inheritance will remain completely insulated regardless of what happens afterward.

How inherited assets are owned, used, transferred, or combined with other property can matter. For example, an adult child who receives an inheritance outright has control over what happens next. They may place money into a joint account, use it to purchase jointly owned property, or otherwise integrate those assets into their family's finances.

If your goal is to provide longer-term protection, you may want more structure than an outright inheritance provides.

A Trust Can Give You More Control

Instead of distributing an inheritance directly to your child, your estate plan can be structured so that some or all of those assets remain in trust for your child's benefit.

Your child can still benefit from the inheritance without necessarily receiving complete ownership of everything at once.

Depending on how the trust is drafted and administered, you may be able to:

Keep Inherited Assets Separate

Assets can remain owned by the trust rather than being distributed outright to your child.

This can make it easier to distinguish the inherited assets from property your child owns jointly with a spouse.

Give Your Child Access Without Giving Them Everything at Once

A trust does not have to mean your child cannot use the money.

The trustee can be given authority to make distributions for your child's needs according to the standards established in the trust.

Those distributions might help with things such as housing, education, health care, major expenses, or other needs you choose to address.

The goal is not necessarily to restrict your child. It is to create a structure around the inheritance.

Add Protection From Creditors

Certain trusts can also include provisions designed to limit a beneficiary's ability to transfer their interest and a creditor's ability to reach assets while they remain in the trust.

Illinois law recognizes spendthrift provisions and provides additional protections for certain discretionary trust interests, although there are exceptions and the protection depends heavily on how the trust is structured and administered.

Decide What Happens to What's Left

Another advantage of keeping assets in trust is that you can provide instructions for what happens to remaining assets after your child's death.

For example, you may want those assets to eventually pass to your grandchildren rather than automatically becoming part of your child's estate.

That can be particularly important for parents who want to preserve family assets for future generations.

This Isn't Necessarily About Disliking the Spouse

Sometimes parents come into an estate planning meeting with a very specific concern about a son-in-law or daughter-in-law.

Other times, the concern is much broader.

They may have a wonderful relationship with their child's spouse today and still recognize that no one knows what the future holds.

An estate plan can be designed around that uncertainty.

You do not have to assume a marriage will fail. You can simply acknowledge that circumstances change and build an estate plan that protects your child's inheritance whether the marriage lasts a lifetime or not.

What If I Have More Than One Child?

Your estate plan also does not necessarily have to distribute assets to every child in exactly the same way.

Perhaps one child has been married for 20 years and has a stable financial situation. Another may be going through a divorce, have creditor concerns, or be in a relationship that makes you uneasy.

You can consider each child's circumstances when deciding how their inheritance should be structured.

That does not necessarily mean changing how much each child receives. It may simply mean changing how they receive it.

One child might receive assets outright while another child's inheritance remains in trust.

The right structure depends on your family, your assets, and what you are trying to accomplish.

Plan for the Family You Actually Have

Estate planning can bring up subjects families do not always like discussing.

Divorce. Debt. Difficult relationships. Financially irresponsible children. Second marriages. Estranged family members.

Ignoring those possibilities does not make them disappear.

A thoughtful estate plan considers what could happen, not just what everyone hopes will happen.

If you are concerned about where your child's inheritance could ultimately end up, talk about it during the estate planning process. There may be ways to provide generously for your child while also putting safeguards around the assets you spent a lifetime building.