Hmmmm. What happens when that formerly sweet In-Law hits the road and takes everything
that you worked so hard for and gave to your sweet child? An Outlaw is created!
It could happen and does happen every day. Put on your white hat and give your gift not to your
child, but to a trust for the benefit of your child. Picture it as though you are giving your child a
steamer trunk full of money, instead of a wheelbarrow full of money. Your child is the only one
with the key to get into the trust (or trunk). If you give your gift outright, it’s like giving the gift
in a wheelbarrow. The money is free for the taking and will blow away in the winds of divorce.
Now, such trusts cannot be used to avoid paying child support or alimony, but that’s not what
we’re discussing here. This trust protects your gift from being taken in a property distribution
and that is likely to save all of it.
Such a wonderful gift, a trust (think “trunk”). You can give asset protection that you just cannot
get for yourself. If your child’s business fails…if your child goes bankrupt….if your child
is sued….if your child gets divorced….your gift is protected so long as it’s in the trunk. The
Outlaw, wearing the black hat and with empty pockets, slinks into the sunset. End of story.
If you have any questions about gifts to your children and how they can remain the child’s
separate property, please feel free to contact my office.