B asks:
How can you protect your kids’ inheritance from your ex spouse? If you die before your children are adults, their other parent could potentially take the money. I’m in the process of setting up trusts as the beneficiaries of my accounts instead of my kids in order to protect against this outcome. Of course this is because my ex-spouse stole from me during the marriage and is terrible at money management. I bet I'm not the only one!
If you die before your children are adults, somebody has to be in charge of the money you leave them until they reach adulthood. And often, if an ex-spouse is taking full custody of your children, a judge may say he or she is also the best person to steward the inheritance—it removes a lot of red tape in the day-to-day care of your children.
But if you don’t trust your ex-spouse to handle the money appropriately, it’s not difficult to cut them out of the equation, says Kate Phelan, regional director of wealth planning and trust advisory at U.S. Bank. There are a few basic things you can do.
