“We don’t want him to receive anything from our estate”: how to ensure that our son-in-law does not get his hands on our money?

Dear Quentin,

My wife and I are in our 60s and have a daughter who is the sole beneficiary of our estate. We live in Ohio.

She is separated from her husband and it doesn’t look like they are going to divorce. They have no children.

We don’t want him to receive anything from our estate. If we leave everything to our daughter, will she have any right to the product?

Reluctant stepfather

Dear Reluctant,

Unlike this gentleman, the law is in your favour.

Your daughter may have her reasons for not divorcing, and that may change over time, but if you and your wife died and left your estate to her, your son-in-law wouldn’t be entitled to a dollar – unless the money mingled with matrimonial property. If, for example, she deposited them in a joint bank account, then it would be difficult to claim those funds as separate property.

Sowald Sowald Anderson Hawley & Johnson, a law firm based in Columbus, Ohio, gives more nuanced examples of an involuntary mixing of property between spouses. “Maybe you still owe on your house and your vacation property. You decide to pay off those two mortgages with the inheritance money. Those properties belong to you and your spouse.

The good news: The federal tax exemption is $12.6 million in 2022, up from $11.58 million for 2021, and Ohio has no state-level property taxes. Setting up a revocable trust for your daughter – one that you can change while you’re alive – is a way to provide your daughter with income, rather than a lump sum. This would protect her legacy, should she be unduly influenced by her husband.

Another benefit of creating a trust: Unlike probate, which is a public process — the equivalent of airing your laundry in full view of your neighbors — a trust is private. In this case, it protects your property from the prying eyes of your son-in-law. These are conversations you can have with your daughter. You can start planning now for your shared hopes for its hopefully independent future.

Yoyou can email The Moneyist for any financial and ethical questions related to the coronavirus at [email protected], and follow Quentin Fottrell on Twitter.

To verify the private Facebook Moneyist group, where we seek answers to life’s trickiest money problems. Readers write to me with all sorts of dilemmas. Ask your questions, tell me what you want to know more or weigh in on the latest Moneyist columns.

The Moneyist regrets not being able to answer the questions individually.

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