keeping your child's inheritance out of their exes hands estate planning


Jennifer Short Sept. 19, 2022

Around half of all marriages end in divorce. If you’re like most people, you want to keep your child’s inheritance safe from ex-spouses, future creditors, and more. If you want to keep your child’s future spouse from inheriting what you leave them, consider using these estate planning strategies.

  • Make sure your will is up to date and states who should inherit what.

  • Put your child's inheritance into a trust fund.

  • Set up a 529 college savings plan for your child.

  • Buy life insurance for your child.

  • Discuss your wishes with your family and have a plan in place in case something happens to you.

Read on to find out how to keep an inheritance from getting divided during a divorce settlement.


When a marriage ends, it can be hard to distinguish what each partner owns. In most cases, anything either partner gets during the marriage becomes joint property. This gets divided in a divorce, but there are some exceptions.

Here's one exception: keeping a secret bank account during the marriage. Inheritance money or monetary gifts given to your child can go into this account. Make sure this account is in their name alone.

In practice, spouses often find it difficult to avoid commingling accounts. When this happens, the entire amount in the account can be marital property by:

  • depositing marital money into the account

  • using it to pay bills

A more effective way to keep your child's gift or inheritance away from their partner is to hold it for them in a trust account. A trust is not just for wealthy parents who leave money to their children. It allows any parent the ability to have more control over inherited belongings and funds.

With a little planning, you can rest assured that your child's inheritance will stay out of your in-law's hands.


Assigning your child's inheritance to a trust entails the following steps:

  • Placing money and property in a trust (the trust beneficiary is your child)

  • Having a chosen trustee (i.e., someone to administer distributions from the trust)

  • Providing written instructions on how to use the money and assets (trust document)

It is possible to name your child as both the beneficiary and trustee of the trust, as long as there are no extra limitations, which defeats the purpose of creating a trust in the first place. Alternatively, you may name a third-party trustee to administer the money on behalf of your child to avoid collaboration.


When you name a third party to have sole discretion over trust fund distributions, it stops your assets from being mixed with others, but it also means your child can't spend their inheritance in the ways they want. If you would rather give them more options and still protect what you leave them if there's a divorce, then make that person a co-trustee with your child. Be aware that there might be restrictions for things like creditor protection and taxes.

Trustees come in different types, each with dissimilar responsibilities and duties. For example, you can select your child as an investment trustee to manage money held in the trust. In this role, your kid is working for the trust (not themselves), so funds from the trust aren't mixed with other assets. Yet if they make good investments, they're also growing their own wealth at the same time. Another option is to have a co-trustee handle distributing resources for your offspring's sake.

Naming co-trustees also offers other advantages. If there are divorce or creditor problems, the child can resign as trustee, leaving only one trustee with total discretion.


When setting up a trust for your child, there are many things to take into consideration. That includes the possibility that your child could die.

If your kid dies before they receive the entire benefit of the trust you create for them, it may, by default, be inherited by their spouse unless you have planned for this possibility. To avoid this from happening, choose a contingent (backup) beneficiary for your child. This can be a grandchild, sibling, charity, etc.

Also, be cautious when handing over a testamentary power of appointment to your child. This authority would allow your kid to send trust property (or their part of the trust) to someone else after they die, and they could be their spouse. You, as the founder of the trust, can restrict who the trust property may benefit, such as your grandchildren or other descendants.


Protecting your children from themselves is one of the many responsibilities of parenthood. If your child is in a marriage that appears to be headed for divorce, you can take steps to keep your hard-earned money from falling into their spouse’s hands by creating trust. This will ensure that your family benefits from the money even if the marriage does not last.

A trust offers you the opportunity to be very specific about your final wishes and have peace of mind knowing that they will be carried out.

Seek out an experienced estate planning attorney to help you create a plan that remains flexible. You might include certain restrictions in the trust now and later realize that you want to remove them. Additionally, you could get rid of the trust altogether if you change your mind down the road. Make sure that whatever plans you have for your money and property are well thought-out by utilizing the expertise of an estate planning lawyer.

This article is about Trusts and Estate Planning, and it is not intended as legal advice. Always consult with an attorney to get personalized legal advice for your unique situation. The experienced estate planning attorneys at DuPont & Blumenstiel in Dublin, Ohio can help you with this kind of financial and legal situation. Reach out to us at 614-408-0004 to schedule a meeting.

Learn more about how to protect your assets in our Consumer's Guide to Estate Planning in Ohio.