Can I protect my daughter’s inheritance from her husband?


Q. My daughter, my only child, recently married a nice man but he is not responsible with his finances. His only source of income is a monthly stipend he receives from a trust and earned income from being a rideshare driver. He has at least $5,000 in credit card debt. I named my daughter as my beneficiary on my Roth IRA and 401(k) accounts. I don’t want my son-in-law to have any access to this money or through a divorce via equitable distribution. She will also get my house and other investments. Is a bloodline trust the best vehicle to use to prevent my son-in-law from inheriting or getting my money when I die?
— Very concerned

A. So-called bloodline trusts were invented for this very reason, and are definitely an option for you.

But first, retirement assets often cannot be re-titled to a trust. The home certainly can be, and investments can be provided they are not tax-deferred, said Nancy Heslin Reading, an estate planning attorney with Reading Law Firm in Newton.

“For assets that cannot be re-titled to the bloodline trust during your lifetime, name the trust as the payable-on-death beneficiary of those assets, and be very careful who you choose as a trustee,” she said. “Depending on the total value of the trust, the grantor may be able to utilize the trust department of a bank to remove family politics from the scenario.”

Your daughter cannot be sole trustee, but in some instances can be co-trustee with the bank, Reading said.

As long as the assets distributed to your daughter are not commingled with the assets of her spouse, those assets would not be subject to equitable distribution in the event of a divorce.

“All the planning will be to no avail though, if the daughter does not consent,” she said. “If she takes her distributions and places them in a joint account with her husband, then the money is available for equitable distribution and the daughter arguably has indicated that she does not think of her inheritance as a non-marital asset.”

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This story was originally published on June 21, 2020. presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.