When preparing a will, it’s not uncommon for awkward family dynamics to complicate the process.
Imagine Joan, a 73-year-old widow who lives in a $1.5-million house in Colorado and has roughly $1 million saved. Joan, who recently started working on her will, wants to leave her entire estate to her son, Roger. But there’s a catch; Joan doesn’t want to include her daughter-in-law in the will.
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In fact, if Joan could have her way, she’d like to ensure that Roger’s wife never gets her hands on this money, even if she ends up living longer than Roger. Joan, who never got along with her daughter-in-law, would feel a lot better about her will if she knew Roger’s wife would never get a cut of the cash.
According to a survey from Psychology Today, situations like this are fairly common, as 15% of men and 60% of women say they have a negative relationship with their spouse’s mother (1).
These awkward situations can make estate planning much more difficult, but that doesn’t mean Joan can’t get her way.
The drawbacks of a will
Many Americans use a will to plan their estate and specify who should inherit their money and property. In fact, more than 75% of all American estate plans included a will in 2021, according to LegalZoom (2).
While a will is an effective way to bequeath money and property to children, those who go with this method lose control over what happens to their assets after they pass them on. If Joan were to leave her assets to Roger and he maintained sole ownership, he would be able to keep his mom’s money and property even if he and his wife were to get divorced.
But if Roger were to mix his inheritance with his marital assets — for example, investing the funds in a shared home or putting the money into a joint bank account — those funds may be considered marital property (3). This means Roger’s wife could be entitled to her share of Joan’s assets in the event of a divorce.
Furthermore, inheriting Joan’s assets through a will would give Roger the ability to bequeath his inheritance to whomever he chooses, which would likely include his wife. If Roger were to pass away first, his wife could potentially inherit everything, depending on how Roger structured his own estate plan.
Joan likely won’t be very happy with these potential outcomes, but there’s another option that can give her much more control over her assets to ensure they don’t fall into the wrong hands.
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Why Joan should put her assets in a trust
One of the best options for Joan to consider is a trust, which can legally protect her money and property while ensuring said assets are distributed based on her wishes. With a trust, the grantor (Joan) must appoint a trustee; someone who will manage the assets on behalf of the beneficiaries who will eventually inherit them.
There are several kinds of trusts that Joan could potentially use to protect her assets:
- Revocable trust: Also referred to as a living trust, this option gives the grantor the ability to make changes to the trust at any time. The grantor has control over how and when beneficiaries receive their inheritance, and the grantor remains the owner of the assets in the trust throughout their lifetime
- Irrevocable trust: This trust is similar to a revocable trust with two considerable differences: the grantor cannot make changes to the trust, and the grantor is no longer considered the owner of the assets in the trust once it’s been created. This kind of trust requires the grantor to give up more control over their assets, but provides the grantor with stronger protection against potential creditors
- Special needs trust: You might consider a special needs trust if you have a child or grandchild with a disability. This trust allows you to leave assets to said family members without affecting their eligibility for Medicaid or other government benefits. Unfortunately, gifting money or assets to a family member with a disability outside of a special needs trust could make them ineligible for government benefits such as Supplemental Security Income
- Spendthrift trust: This option can be used for grantors who are bequeathing money and/or assets to a beneficiary who could potentially mismanage the funds. For example, a grantor may choose to set up a spendthrift trust for a beneficiary who has substance abuse or gambling issues
With a trust, Joan can provide detailed instructions for how her assets are to be distributed. For example, she could specify that portions of the money are released to Roger on a set schedule, or that Roger receives an allowance from the trust while leaving what’s left to his children.
Joan could also limit the use of the trust’s funds. For example, she could set up a trust that only gives Roger access to the funds for certain things, like purchasing a house or paying for his kid’s college education.
Creating a trust is well worth Joan’s consideration, but before she makes a move, she’d be wise to work with an estate lawyer to put the right type of enforceable trust in place.
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Article sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
Psychology Today (1); LegalZoom (2); ACW Law (3)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.