Sadly, not all of us welcome our children’s partners with open arms. We try not to judge, knowing that a heavy hand could alienate us from our kids. What can you do if you are accustomed to being generous with a beloved daughter, but don’t want their significant other gaining access to your assets?
nj.com notes in, “Protecting inheritance from future son-in-law,” that the easiest option is for the daughter to create an account to which only she has access and into which she deposits any money from her parents. As long as her future husband's name isn’t on the account, and she hasn’t given him power of attorney over it, he can’t get to it. However, if there’s a concern that the daughter may not be able to resist her future husband’s attempts to gain access to the funds, a parent will need to take additional steps.
Here are some examples:
Monthly bills: if the daughter uses the gift to pay monthly bills, the parent could pay the bills directly instead of giving her money.
Children: if she has children and is setting aside the money for their college education, the parents could set up a 529 savings account for their grandchildren. They could name themselves as the custodians.
Savings: if the daughter is simply saving the gift money, a trust may be a good solution. However, trusts are not as simple as the other options discussed above. The more restrictive the trust terms are to protect the assets from the son-in-law, the greater the possibility that gift and estate taxes will become an issue.
Prenuptial Agreement: another thing to consider is whether the parents have given their daughter significant amounts of money already and because of that, she’s entering into the marriage with more assets than her spouse. In that case, she should consult with an attorney about a prenuptial agreement. If the marriage then ends in divorce, she will not have to split any of the funds with her ex.
This would be a good time to update your estate plan so that anything you had meant to leave to your daughter is protected, and that if something should happen to her, that her inheritance does not become her husband’s property.
Reference: nj.com (November 23, 2017) “Protecting inheritance from future son-in-law”