Many New York residents may be confused about the estate planning process.
What can make it even more complicated is determining what to do so that
in the event that people's children divorces, the ex-spouse does not
take all of their hard-earned money. Here are some things people should know
estate planning in this situation.
Depending on state law, the judge divides marital property during a divorce.
Marital property includes anything that either spouse acquired during
the marriage. However, this does not include inheritances, which are considered
separate property. This means that property left to one spouse remains
the property of that spouse and the ex-spouse is not allowed to claim it.
However, it's not as simple as that. It becomes complicated estate
planning in terms of any appreciation of the inheritance's value.
This is considered marital property and must be divided during a divorce.
Therefore, parents may want to leave money in a trust instead of an inheritance.
In a trust, the child can receive the money over a period of time instead
of a lump sum at the time of the parent's death. This will result
in less value appreciation, which means less money for the former spouse.
Managing marital and non-marital property can be complicated. Items that
a person owned before marriage can become marital property if the spouse
helped or contributed to an item in some way, such as a home or a business,
the item could be subject to division during a divorce. Parents looking
to prevent the transfer of money to a child' spouse should investigate
Source: The Gazette, " Money & the Law: Child's divorce can complicate
estate planning," Jim Flynn, Nov. 25, 2012