Protecting My Children
An inheritance left outright to your children can be lost to divorce, creditors, or bankruptcy if it ever gets commingled with their own money. A discretionary trust can keep the inheritance separate and protected — while still providing generously for your child’s actual needs.
What you should know
- Under Alabama law, an outright inheritance can become marital property the moment it is mixed into a joint account or used for joint expenses.
- A discretionary trust with a spendthrift clause means your child does not personally own the assets — the trust does — which keeps them outside divorce and most creditor claims.
- The HEMS standard (Health, Education, Maintenance, Support) gives the trustee broad authority to distribute generously for everyday needs.
- This planning is most effective when done well before any problem appears. Done in reaction to a known crisis, it can raise fraudulent-transfer concerns.
- A discretionary trust is not a judgment about your children. It is a way to keep the inheritance you built from being lost to life events you cannot predict.
Outright or in a trust — what fits how you want to leave it?
Five short choices. Brent reads your answer back to you at the end.
A 30-second guided quiz. Get a personal read on whether a trust fits how you want to leave it.