12 Jun Can I protect an inheritance for my divorcing child?

Q. If there are multiple children who will inherit assets equally and one has a divorce looming, is there an option to omit one from my will so the mate doesn’t get half of the asset? I still want to somehow distribute money to that child.

— Mom

A. We’re glad you’re planning, and we’re sorry to hear a divorce is on the way.

You have options here.

In New Jersey, property that is acquired before a marriage or property that is acquired during the marriage by gift, inheritance or bequest in a will is not subject to equitable distribution upon divorce, said Catherine Romania, an estate planning attorney with Witman Stadtmauer in Florham Park.

But there’s a catch.

Those funds can’t be commingled with marital property or otherwise gifted to the spouse, for example, by titling the account holding the funds with the spouse as joint owner, she said.

So you may leave your child the bequest outright if you are confident that he or she will keep it separate and apart, Romania said.

If you are not confident your child can keep the inherited funds separate and apart from marital funds, you can leave your child the bequest in trust, she said.

A trust can be created either in your will or by a separate trust document, she said, and the terms of the trust would be set forth in the document.

“Terms would include naming your child as the beneficiary, the names of the trustees, who would be responsible to administer the trust and make the payments to your child, the purposes for which funds should be distributed, such as any purpose in the trustees’ discretion, or instead, for health, education, maintenance and support, when the trust should terminate and how the funds in trust should be paid at termination, in addition to other provisions,” Romania said..

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This story was originally published on June 12, 2023.

NJMoneyHelp.com 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.