How to Handle In-Laws When Engaging in Estate Planning
By: Barry E. Haimo, Esq.
January 21, 2020
Regardless of your relationship with them, your in-laws should always be a part of your estate planning. Why? Because there are a number of ways they may impact your estate, and understanding how is the surest way to meet your planning goals.
Unique family circumstances will ultimately inform decisions on how in-laws may factor into an individual’s estate plan. While they may be more or less important considerations to you, they should be considered nonetheless.
Which In-Laws to Consider When Planning Your Estate
The short answer to this question? All of them. The first relationship that comes to mind when the term “in-laws” is used is typically your spouse’s parents. Remember, though, your spouse’s siblings and your children’s spouses — they are your in-laws, too.
All of these relatives may have inheritance rights to what are or will become your own blood relatives’ estates. On the other hand, in-laws who have become very important to you over the years may have no rights to your legacy if you do not consider them at all.
Furthermore, it would be prudent to never underestimate the influence an in-law may have over your blood relatives’ decisions.
Who Gets What According to Florida Law
In most cases, when a person passes away and there are no other estate planning tools in place, their estate is broken out like this:
When your spouse is previously departed, your children get everything, and when you have no descendants, your surviving spouse inherits all of it. When you have both a spouse and descendants, the estate is typically split 50/50.
Now, there’s no sign of in-laws in Florida’s intestate succession laws. However, once your children marry, if the assets you’ve bequeathed to them aren’t properly protected, depending on their spouses, your legacy may be at risk.
So what do Haimo Law’s clients do to address in-laws when engaging in estate planning? Many choose to establish a Bloodline Trust.
What to Know About a Descendants Bloodline Trust or a Dynasty Trust
There are a number of trusts that serve as helpful estate-planning tools for handling in-laws, but the most direct route for those who intend to keep their legacy limited to blood relatives is by establishing a Descendants Trust or Dynasty Bloodline Trust.
This type of trust is considered a revocable trust while a client is alive, and may only be revoked by the client.
Bloodline Trusts Have Specific Uses
Bloodline Trusts are designed to protect family assets and ensure an inheritance that is only for clients’ children and their descendants. In fact, there are only a handful of specific uses that assets entrusted in one may be used for: health, education, maintenance, and support.
Assets Are Shielded from In-Laws and Creditors
This type of trust never allows for trust assets to be made available to sons- and daughters-in-law, including in marriage, in divorce, or even in either equitable distribution or alimony scenarios. All assets are shielded from children’s and spouses’ creditors as well.
Principal Distribution Only to Descendants
Once children have been designated as trustees, they may distribute the principal to themselves or their descendants, and when those children pass on, the remaining principal may only be paid to their own descendants.
These are just some of the benefits of establishing a Bloodline Trust, and this is only one estate planning strategy for handling your in-laws. For more information about this and other strategies for managing the impact of in-laws upon future generations of beneficiaries to your estate, reach out to Haimo Law.
Author:
Barry E. Haimo, Esq.
Haimo Law
Strategic Planning With Purpose®
Email: barry@haimolaw.com
YouTube: http://www.youtube.com/user/haimolawtv
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