You want your child to benefit from their inheritance, not lose it to a divorce or financial dispute. Unfortunately, once inherited assets become mixed with marital property, they may no longer belong solely to your child. If they deposit the money into a joint account, use it to buy a shared home, or fail to protect it in writing, an in-law could gain access. The right legal tools can prevent this from happening. With careful planning, you can ensure your child’s inheritance remains theirs—protected from outside claims and future complications.
Understanding the Risk: How In-Laws Can Gain Access to an Inheritance
An inheritance is typically considered separate property, meaning it belongs only to the person who receives it. However, if your child isn’t careful, their spouse could gain access—especially in the event of a divorce.
One of the biggest risks is commingling assets. If your child deposits inherited funds into a joint account, uses them to pay shared expenses, or invests in marital property, those assets may lose their separate status. In a divorce, a court could consider the inheritance part of the marital estate and divide it accordingly.
Even without divorce, an in-law could still access inherited assets. If your child’s spouse faces a lawsuit, creditors may go after any funds that aren’t legally protected. Without proper planning, your child could unknowingly put their inheritance at risk. Fortunately, there are legal strategies that can help keep assets separate and secure, no matter what the future holds.
Solutions for Protecting Your Child’s Inheritance
Keeping your child’s inheritance separate from their spouse requires thoughtful planning. Without legal protections in place, inherited assets can easily become marital property. Here are some effective ways to ensure your child keeps full control of their inheritance:
- Use a trust – A properly structured trust is one of the strongest ways to protect an inheritance. Instead of passing assets directly to your child, you can place them in a trust with terms that prevent an in-law from accessing the funds. Your child can still receive distributions, but the assets remain legally separate.
- Keep inherited assets separate – If your child receives an inheritance, they should avoid depositing it into a joint bank account or using it for marital expenses. Keeping funds in an individual account and maintaining clear records helps preserve their separate status.
- Encourage a prenuptial or postnuptial agreement – A written agreement between spouses can specify that any inheritance remains separate property. While this requires cooperation, it provides an added layer of protection.
- Use gifting strategies – Instead of giving a lump sum inheritance, you may prefer to make structured gifts over time. This reduces the risk of large amounts being commingled or lost in a divorce.
With the right approach, you can ensure your child benefits from their inheritance without unwanted interference.
Why a Trust Is the Strongest Protection
A trust offers the highest level of protection for your child’s inheritance. Unlike direct inheritance, which can be mixed with marital assets, a trust keeps funds legally separate. Even if your child experiences financial trouble or divorce, assets held in a trust remain protected.
- Keeps assets separate – Because the trust, not your child, owns the assets, an in-law cannot claim them in a divorce.
- Prevents commingling – Trust distributions can be structured in order to avoid accidental mixing with marital funds.
- Protects against lawsuits and creditors – Assets in the trust are shielded from legal claims against your child or their spouse.
- Provides long-term control – You can set terms for how and when your child receives funds, preventing reckless spending or outside interference.
A trust gives you peace of mind, ensuring your child benefits from their inheritance while keeping it safe from external threats.
Protect Your Child’s Inheritance with OC Wills & Trust Attorneys
Your child’s inheritance should remain theirs—not at risk of being lost in a divorce or financial dispute. With the right legal tools, you can keep these assets separate and protected while still allowing your child to benefit from them. At OC Wills & Trust Attorneys, we will help you create a customized estate plan that ensures your legacy stays in the family. Contact us today to discuss your options and take the first step toward securing your child’s financial future.
