The holiday season is when you see family members who don’t live nearby. That’s one of the main reasons why Christmas and New Year’s are such festive times: the extended family either gathers under your roof or comes into the immediate area so you can all catch up and count your blessings together.
It’s also the ideal time to think about putting together an estate plan or revising your existing one. When you’re all together, it’s a lot easier to take note of everyone’s current situation: your children, grandchildren, and others who will benefit from the plans you’re preparing to put in place. In this blog, the team at Kentucky Estate Planning Law Center explains how holiday conversations can help inform your estate planning decisions in the New Year.
Is Anyone Likely to Get Divorced?
Although Kentucky generally excludes inherited assets from property division during a divorce, there are times when separately owned property becomes commingled with the marital estate. For example, if you leave your Florida vacation home to your son and he renovates it using marital funds, any increase in value is subject to division upon divorce.
If you get the impression that your son’s marriage isn’t as harmonious as it used to be, you can put their inheritance in a trust with an independent trustee, such as a dependable family member or even a bank or attorney. As an additional protection, trusts may be drafted in a way that authorizes an independent third party to temporarily remove your son as a trust beneficiary if a divorce is pending.
Is Anyone Having Debt Problems?
Sometimes, even after all the nurturing, love, guidance, and support you can give a child, they still don’t know how to handle money. There are a variety of reasons why your adult child may have financial problems, including not budgeting or overdoing it with credit. Whatever the reason, if your holiday conversations suggest that the problem isn’t improving, you may want to plan more carefully for them.
This is another situation where a trust can be beneficial. Consider setting up a spendthrift trust that can protect your loved one from financial dangers and temptations. With this type of trust, the beneficiary’s access to assets is carefully controlled. Rather than receiving their inheritance all at once, the funds are released incrementally. In addition, since assets belong to the trust, creditors can’t come after them to satisfy your child’s debts.
Divorce and debt issues are only two considerations when you’re creating a new estate plan or updating an old one. Others include a child or grandchild who has been diagnosed with special needs (making a special needs trust advisable), the arrival of a new grandchild, and more.
Make an Appointment With an Estate Planning Lawyer
Estate planning requires action as well as planning. Once you know what your goals are, it’s time to discuss them with an estate planning lawyer. At Kentucky Estate Planning Law Center, our goal is to help you prepare for the future your loved ones deserve. Whether you need a brand new plan or want to update an existing one, we’re here to help. To schedule a consultation, call 270-982-2883 today.