How to Keep Your Wealth With Blood Relatives Should Your Child-in-Law Inherit?
Family dynamics can be complicated, and the wealth you pass on to loved ones could end up with those you never intended. Craig Hersch examines the child-in-law dynamic in inheritance in this column. You can read his full thoughts at FloridaEstatePlanning.com/should-your- son-in-law-or-daughter-in-law-inherit.
However, if Madelyn dies and significant wealth lands with Thomas and Michael, Tony might lack funds to pay for necessities while his children are millionaires. I’ve seen this happen with some files. Susan probably wouldn’t want that result either. There are middle-of-the-road options available. One creates a continuing trust for Tony if Madelyn chooses to exercise her power of appointment to benefit him as opposed to an outright distribution that may end up out of the bloodline. Susan’s documents could require that an independent trustee manage the account and determine whether Tony is entitled to distributions. The trust for Tony could also be built as a “sprinkle” trust, benefitting not only Tony but also Thomas and Michael. For example, any income the spouse doesn’t need can be distributed to the grandsons. The power of appointment could limit the percentage of Madelyn’s trust funneled into Tony’s share to 30%. The other 70% could immediately vest with Thomas and Michael. The power of appointment is a useful tool to make an otherwise inflexible irrevocable trust more fluid, so it can adjust to the needs of the family many years after Susan’s
Most of my clients’ estate plans ultimately distribute the assets to the children, and if a child predeceases, then her share is often slated to be distributed to her children. This is known as a “per stirpes” distribution. In many testamentary trusts created for children, that child can, through a “power of appointment,” change the per stirpes schematic. So, Susan may grant her daughter Madelyn the power to appoint what remains of her share through Madelyn’s will to her “descendants, their spouses, and charities.” The big question is whether Susan wants to give Madelyn the authority under the power of appointment to route all or part of the trust share to Madelyn’s spouse, Tony, when she dies. What are the risks? Susan may want the trust only to benefit her bloodline. What if Madelyn leaves money to Tony, and after her death, he remarries? If his will leaves his entire estate to Tony’s new spouse, then at his death, Susan’s wealth might never benefit her grandsons, Thomas and Michael.
death. But they should not be boilerplate. If this column has raised questions, please reach out to schedule a review meeting!
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INGREDIENTS
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1/2 tsp salt
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1/4 cup pine nuts, plus more for serving 1 cup extra-virgin olive oil 1 cup grated Parmesan cheese, plus more for serving Red pepper flakes (optional)
4 cups broccoli 1 lb penne pasta 2 cups basil leaves
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2 garlic cloves, smashed
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DIRECTIONS 1. In a large pot, bring salted water to a boil over high heat. 2. Add broccoli and cook until tender (around 4 minutes). Using a slotted spoon, transfer broccoli to a blender. 3. Bring water back to a boil and add pasta. Cook until al dente and reserve 1 1/4 cups of pasta water. 4. In the blender, add basil, garlic, pine nuts, olive oil, salt, and Parmesan cheese to the broccoli and blend until smooth. Slowly add pasta water until a sauce forms. 5. Drain pasta and transfer back to the pot. Mix sauce and pasta together until fully coated. 6. Top with more Parmesan cheese, pine nuts, and chili flakes if desired.
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