Estate Planning

Provide Creditor and Divorce Protection to Your Children

An Irrevocable Life Insurance Trust (ILIT) can insure that your beneficiaries are protected from their inabilites, disabilities, predators, creditors, in-laws, and out-laws, including potential ex-spouses. An outright transfer of an insurance policy to beneficiaries does not provide the same level of protection as an insurance trust. Maximum flexibility and creditor protection can be achieved through the use of an independent trustee, spendthrift provision, and the grantor's surviving spouse having a testamentary limited power of appointment over the family trust (after death of the insured).     

Do not buy life insurance for your spouse without talking first to an attorney about the difference between buying life insurance outright and buying life insurance through an ILIT. 

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Remarriage - How to protect your estate for your children from your first marriage before remarraige

It's likely that the divorce rate has a direct link to the rate of remarriages. As second marriages become more common, estate-planning issues between couples and within families need to be considered.

Finding solutions that work for both clients is challenging where clients have children from previous marriages. The issue can be vague when one client wants to leave a most of the estate to children from a previous marriage and almost nothing to the second spouse or the converse. If both spouses are clients, the challenge is to overcome conflicts and provide for each spouse.

In the United States, nearly 75 percent of divorced people remarry, and they usually do so less than four years after divorce. Nearly one-third, however, remarries within a year after their divorce is legal.

Blended Families – Securing your estate for your children from your first marriage.

What type of trust is best in a second marriage where each spouse has children from a previous marriage?

How can your father provide for his second wife, but be sure his assets go to his children from his first marriage when the step-mother dies? One way is to use a Qualified Terminable Interest Property trust (QTIP). Let's say your father remarries and he wants to provide for his second wife if he should be the first to die. By using a QTIP trust he can specify that the trust assets ultimately go to his children from his first marriage rather  than his new wife's children from her previous marriage.  Confusing, perhaps,but a real concern for many blended families.