Divorcing to protect inheritance

[weightstrugglinmum]

Just as the title reads really, I'm wondering if anyone has divorced to protect their expected inheritance?

I'm thinking of this to protect myself and my young sons future as my in-laws financial situation is a poop show and when they pop their clogs it's going to be potentially very difficult to resolve and very costly. And I want nothing to do with that.

I guess if you’re willing to leave him so that you don’t have to share, the love has gone? In that case divorce is always an option.

Not if you make a will

A named account he has no access to, so it’s not a marital asset.

But as pp said, that only applies to inheritance. Law is different for gifts. Please see a solicitor ASAP

The property gets sold to pay off the outstanding mortgage!

Thank you everyone, i really appreciate your responses. Will get legal advice ASAP.

This scenario is exactly the sort of thing trusts are for.

Make sure your own Will leaves your assets to your children (you could leave a life interest to DH if children still young, to avoid inheritance tax and so he can keep the roof over their heads, but you can state it all goes to the children on his remarriage or death). Also ask your parents to consider leaving their wealth in a Discretionary Trust (less likely to be taken into account on divorce as you have no entitlement but the trustees have discretion to provide for you).
Depending on the values involved, it might cost a little bit in tax but for asset protection you might think that's worth it.
See a lawyer.

Thank you!

Definitely legal advice and a trust. This happened to my DB he was married when he inherited and his ex wife used a large portion to deck the home with luxury furnishings and then syphoned so much of it off to prop up her parents failing business who then went bankrupt, So much of his relatives hard earned money was thrown away by his ex, and is the reason she is his ex.

What is it exactly you think he'll be resolving though, and how? You know he doesn't have to pay their debts, right?

If you don’t trust him, with finances or any other area of life, and you believe he would take and spent large amounts of family money without agreeing about it with you first then the marriage is already over in my opinion.

One option to consider when you inherit (assuming government does not change the rules) is a deed of variation, where you pass on your inheritance, or part of it, direct to your DC, could be useful if they need a house deposit for example.

Wrong

To be honest once you start thinking like this the marriage is over anyway. You might as well start to move towards divorce.

I don't understand the view that debts end on death - what do people who believe this think happens to, for example, outstanding household bills such as utility bills on the property, credit card debts etc. If the estate has assets these bills must be paid.

I know! Imagine how it would be to spend thousands on credit cards just before you die, take out a massive loan and leave it to your kids to bolster their inheritance, then die and none of it needs paying back!

You need to divorce him anyway Op, even if you put the money where he can't access it you'd be put under constant pressure to help his parents. If your marriage is dead anyway then get on and seperate

It sounds like you are getting divorced anyway so may as well get on with it
Your parent is wealthy enough for their estate to be liable for IHT
Divorce right now would be a financial struggle
You think your parent would gift you a substantial amount of money if you were already divorced

Would a frank conversation with your parent to see if they can dig you out of a hole be in order?

The point of a mortgage is it is secured on the property. In fact, a “mortgage” in itself isn’t the loan, it’s a description of the type of security agreement.

The bank just take the property back if they have to. Why would you think that responsibility would fall to someone else?

Please get proper advice from two lawyers. You need to understand the position from both a family law perspective and from a private client perspective. Some of the things said here about inheritance strategy may not help you or even complicate things further.

I am a lawyer.

That would depepnd on whether, between you, there's already enough moneey for you both to be housed and reasonably well financed

Strictly speaking inheritances belong to the person who received them, providing they've been kept in their sole name and not already been dipped into for joint expenses, but they can be up for grabs if there's not enough joint money to keep you both

That, though, would be decided on the spouses' own finances and certainly not on those of the extended family

It’s paid back from the person’s estate to extent possible but unsecured creditors ( utility companies, credit card companies etc) cannot chase the family for the person’s debts if the person’s estate doesn’t have the assets to pay.

ie if John dies and his estate is worth 500 pounds and he has debts of 3000 then 2500 of that will just go unpaid. The executor pays the creditors in ranked order until the 500 runs out.

Wrong.

I wonder what the responses would be if the OP was a man and he wanted to ringfence a future inheritance from his wife?

There is no need for a Trust for your children to inherit- it's terribly complicated.

There is a Deed of Variation on a Will which means that after you inherit the money can be bypassed to your children to protect it if that's your choice.

This would be handled ideally by a solicitor, who winds up your parents' estate.https://www.gov.uk/alter-a-will-after-a-death

What this means is that the estate/ money goes to your children but you can decide how much.

Except OP is not thinking so much about him but how he would bail out his own parents using the money.

And to answer your question, if the marriage is in trouble, the response would be the same if it was a man asking this here.