Like most people, when you think about estate planning your first thought is probably focused on the disposition of your assets when you are gone. While this is certainly a primary function of an estate plan, your comprehensive estate plan should do that – and much more. Specifically, your estate plan should also help protect and grow your assets while you are here. If you do not include sufficient asset protection strategies in your estate plan there won’t be anything left to pass down to loved ones when you are gone. In fact, one of the most common mistakes people make in their estate plan is failing to recognize some of the potential threats to their assets. For example, have you considered the in-law problem? You may not realize it, but keeping assets in the family can become a legitimate concern once your adult children start forming families of their own.
Threats to Your Assets
When most people think about potential threats to their assets they immediately think about their own divorce or financial downfall. True, your own divorce could create a significant threat to your assets; however, there are a number of simple and effective ways to prevent that from happening and/or to reduce the impact if it does. Preventing your own economic downfall may not be as simple, but at least you are in control of your own finances. Therefore, you are not at the mercy of someone else’s financial mismanagement or spendthrift ways. Consequently, you may have already considered these common threats to your assets and included counter-measures in your estate plan to try and prevent the loss of assets. What about threats you haven’t given much thought to though?
The Threat from the In-Laws
When an adult child marries, you (hopefully) welcome an entire other family into your family. You gain a son-in-law or daughter-in-law along with a whole family of related in-laws. In a perfect world, everything goes wonderfully and the couple stays married and they grow old together. Statistically, however, they stand about as much of a chance of ending up divorced as they do staying married. Of course, you will be rooting for the marriage to last; however, you should at least consider the possibility that it will not and the impact that could have on your assets. Even if the marriage does last, an in-law can still present a considerable threat to your assets in a variety of ways. Imagine the following scenarios:
- Your daughter Susan marries Doug. Over the course of ten years they have three children. The marriage appears to be just fine until one day you learn that your daughter Susan has been unfaithful for the majority of the marriage. A contentious divorce follows. Not only does Doug want everything he brought into the marriage, but Doug is also asking for assets valued at over $2 million that you gifted to Susan as part of her inheritance. It appears that Susan may have co-mingled those assets, potentially putting them at risk of becoming part of the marital estate for purposes of the asset division in the divorce.
- Your son Bob marries Julie. Everyone likes Julie at first, until you start to see Bob changing. Bob no longer attends family functions nor does he stay in touch with family members or friends. It appears that Julie is exerting considerable influence over Bob and isolating him from the family. A bit too late, you start to worry about Bob’s interest in the family business and the possibility that Julie might get Bob to sign it over to her.
Keeping Assets in the Family – Asset Protection Strategies for the In-Law Threat
The two scenarios above illustrate how easily an in-law can become a threat to your assets. The good news is that there are a number of asset protection strategies that can be incorporated into your estate plan to prevent in-laws from getting ahold of your assets. The key is to discuss the issue with your estate planning attorney at length to develop a strategy that will keep your assets safe.
If you have additional questions or concerns related to asset protection planning, contact the experienced New Hampshire estate planning attorneys at DeBruyckere Law Offices by calling (603) 894-4141 or (978) 969-0331 to schedule an appointment.