How do I protect money gifted to kids if they divorce?

[Joylush]

Sounds like you're fully agreeing with me OldShooter.

From my post:



That same trust might be viewed as "controlling" by another recipient. Or your son might view it as controlling if it was changed to be less flexible, have more constraints, etc.

Again, controlling or protective, a distinction without a difference.

Can’t say I agree. There is a distinction. How it is viewed or perceived depends on intent.

And honestly when it comes to your money you ultimately get to decide how to use it and protect it so as to help insure it’s used the way you intended.

 

[jayanu]

In my state gifts and inheritances which are never commingled are the separate property of the individual and not subject to division in a divorce. Nothing fancy is required, just keep it in a separate account. Some other states have similar rules, but I don't know which ones do and which one's don't.

Wouldn't it depend on which state the OP is and which state the DS is at the time of death? I live in PA and it does not have State Tax but does have an inheritance tax, Kids have to pay that regardless of which state kids reside.

 

[SecondCor521]

Wouldn't it depend on which state the OP is and which state the DS is at the time of death? I live in PA and it does not have State Tax but does have an inheritance tax, Kids have to pay that regardless of which state kids reside.

Well, IANAL, but I think in terms of gifts or inheritances, the state of residence of the recipient at the time is what would apply in terms of the commingling rule.

Estate taxes are paid by the estate, and in general depend on the state of residence of the decedent. Inheritance taxes are paid by the heirs, and those in general depend on the state of residence of the recipient. But taking a quick look it may be that PA's inheritance law applies to out of state residents.

(My family all currently lives in states such that the only thing we need to pay attention to is the federal estate tax, so that's the one I watch.)