I was speaking to my cousin last night until 1:30 about families and the power of living trusts to help fix broken relationships. There is one person, let’s call him Bill, in our family who is looking at getting a divorce but he has several minor children. Without getting into too many details, let’s assume that Bill is the victim of a woman going through a wild stage.
If the divorce goes through, Bill probably won’t be award the children. Let’s say he dies and wants to leave his assets to his kids. Who actually will get the assets? His kids? Nope. It will be the his ex-wife. Yes, the assets are earmarked to got the kids but it will be the surviving parent who actually controls those assets for the children. Now let’s say say she gets re-married to a controlling man. Now who has the assets? The step dad.
This all can be fixed by simply forming a living trust for Bill and then require the assets continue in trust for the benefit of his children upon his death. That trust can now be controlled by anyone Bill chooses such as his brother. The money is protected and can only be used for the children. The ex-wife will still have some benefits because the trust will be providing for some of the children’s education, health, maintenance and support.
But by properly drafting the trust we’ve kept it out of reach of the ex-wife and her husband. Awesome!