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Ask the Retirement Expert: If I Leave Money to My Daughter, Can I Keep Her Spouse from Accessing It?

Amy Jamrog, CLU®, ChFC®, CASL® •  November 27, 2015 | Home and Family, Your Finances, Ask the Expert

By Amy Jamrog, CLU® ChFC® CASL®

Amy has been a Wealth Management Advisor with Northwestern Mutual since 1999. She has achieved company, industry and community recognition since her first year in business. Over the past 16 years, she and her team have developed a specialty in helping baby boomers with retirement income planning.

Each week our Northwestern Mutual retirement experts answer your questions. This week’s question:

I want to leave my daughter money. Is there a way to make sure her spouse doesn’t have access to it?

The most effective method is to leave money to your daughter in trust. The trust can be created today if you want to give money to your daughter now, or it can be created in your will and go into effect after you are gone. The trust can receive investment assets and can be named beneficiary of your retirement accounts and/or life insurance. The terms of the trust will direct the trustee how much of the income and principal should be distributed to or for the benefit of your daughter. In order to minimize the access your daughter’s spouse might have, the trust can direct the trustee to pay expenses for your daughter rather than make cash distributions directly to her.

Since your daughter is already married, you have missed the opportunity to suggest that she create a prenuptial agreement. You could discuss a postnuptial agreement; and if they are both agreeable to it, they could work with an attorney who specializes in family law. But that can be a tricky family conversation!

Learn more about trusts by downloading our free guide: Your Estate Plan: Is a Trust Right for You?

Do you have a question for our Northwestern Mutual retirement experts? Click here to send your questions.

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