We had a client recently ask us this question, “I love my daughter and my grandchild but I am not a fan of my son-in-law. Is there any way I can leave everything to her without him getting any of it?”
This is a question that comes up all the time so if you too are concerned about it, you are in good company.
The short answer is “yes”. You can plan so that the son-in-law or daughter-in-law won’t have any claim to any part of what you leave your child and grandchild. But let’s dig in a little deeper so we cover the various possibilities because it might not be as clear cut as you might like.
One possibility would be that you leave everything to your daughter and she inherits it all from your estate at your death. It is her money! No one else has a claim to it. However, Alabama law is pretty clear that, if she treats the money as a joint asset, her husband can claim half of it in a divorce. In order for her to keep it clear of being considered joint property, she can never regularly use it to benefit the marriage (like a trip to Disney or a room addition).
How she can use it without it being considered as benefiting the marriage? If she buys clothes with it, has she relieved the family of having to pay for clothes? Doesn’t that benefit the marriage? It will be a factual question to be resolved by the judge in a divorce.
The second possibility is that you leave everything to your daughter but she predeceases you. If your Will says “per stirpes”, her share would then pass to her children. It will not pass to his children too if he has children from a previous marriage or an outside dalliance. If the grandchildren are minors, this creates problems. We always recommend a trust to hold the assets until the grandchildren are old enough to manage it themselves without help.
A third possibility is that you leave it to your child in your Will and she inherits it from your estate but dies shortly thereafter. Her own Will might leave everything to her spouse, so he will then become the owner of the inheritance you left to your daughter. He then remarries and now some strange woman is benefiting from your hard work and your grandchild never sees the inheritance you left.
None of these outcomes sound like what you would want. There is another possibility though, the one we recommend.
We would recommend that your daughter’s share be held in trust for her benefit and for the benefit of your grandchild. Someone else would be the trustee. If your daughter predeceases you, the trust still holds the money for the grandchild. If your daughter outlives you but dies shortly thereafter, the trust still holds the funds for the grandchild. If your daughter ends up getting a divorce, the argument is that she can’t claim ownership of the money in the trust that she hasn’t withdrawn yet so her husband doesn’t have a claim to half of it.
The best part about this planning is that he won’t even know about it until you are both gone!
If you are concerned about your son or daughter-in-law receiving what you really want to go to your grandchild, give us a call. This isn’t something one of those online Will preparation apps can help you with and it certainly isn’t something that will take care of itself!