As a parent, one of your primary roles is ensuring your children’s financial safety. If your assets aren’t properly protected, creditors may be entitled to seize your children’s inheritance funds and other personal assets.
There are proactive steps parents should take to protect their children’s inheritance and to prevent creditors from ever getting hold of it.
Why Creditors May Go After Your Child’s Inheritance
Direct inheritance will become part of your child’s assets. This gives credit card companies, medical debt collectors, and lawsuit judgments grounds to legally claim funds if debts are owed.
If your child owes money, such as student or personal loans, creditors may seek an inheritance as an opportunity to collect.
Luckily, there are measures parents can take long before this even becomes an issue.
How To Protect Your Children’s Inheritance From Creditors
Create a Trust: Several types of trusts will protect your children’s assets. A spendthrift trust will prevent creditors from accessing a beneficiary. An irrevocable trust protects assets once they’re transferred and no longer considered part of your estate, making it more difficult for creditors to reach.
Plan for Divorce Protection: If you and your spouse were to get divorced and your children’s assets are not protected, they will become apart of marital property and may not be divided equally among your children.
Trusts, prenuptial agreements and postnuptial agreements will keep their inheritances away from creditors and your own separate assets.
Work with an Estate Planning Attorney: Estate planning attorneys in New York State can help protect your children’s inheritance from creditors by walking you through the various kinds of trusts, determining which ones would be most ideal for you.
If you feel as if your children’s assets are not as protected as they should be, the Law Office of Todd Cushner & Associates is here to help. Contact us today to schedule a free consultation.
