Divorce is a time of financial and emotional upheaval, especially in high-net-worth families. While much of the focus is often placed on dividing marital assets and establishing support obligations, it is equally important to safeguard what is meant for the next generation. If you’ve taken steps to secure your children’s future through estate planning or designated inheritances, ensuring that those assets remain protected during divorce is critical.
At Wilder Mahood McKinley & Oglesby, we understand that preserving your children’s financial future is just as important as resolving the matters at hand. Below, we explore how to protect and preserve your estate plan in divorce and ensure your children’s inheritance is preserved amid a complex legal process.
Are Inheritances and Trusts Marital Property?
Generally, inheritances received by one spouse are considered separate property—not subject to equitable distribution in a divorce. However, there are exceptions that can put these funds at risk:
- If the inheritance was commingled with joint marital assets (e.g., deposited into a shared bank account), and can no longer be traced, it may lose its separate status.
- If the spouse was a trust beneficiary and regularly received distributions that were deposited into marital accounts or consumed for the benefit of both parties during the marriage, the opposing party may seek a portion of those funds.
In high-net-worth cases, the financial stakes are high and understanding how these factors play into asset division is essential.
RELATED: Read how to prepare for a high-asset divorce.
Strategies to Protect a Child’s Inheritance in Divorce
Whether you’re planning ahead or already facing divorce, there are proactive steps you can take to protect your child’s inheritance:
- Keep inherited assets separate – Avoid depositing inherited funds into joint accounts or using them for joint purchases.
- Use prenuptial or postnuptial agreements – These documents can clearly define what is and isn’t marital property and safeguard inherited wealth by specifying the ability of a spouse to leave certain assets to their child(ren) as part of a last will and testament or estate plan.
- Consider setting up a new trust for your child – If you want to leave an inheritance but are currently navigating divorce, creating a new irrevocable trust with strong protective language may offer peace of mind.
Work with an Attorney Experienced in High-Net-Worth Divorce
Preserving family wealth through divorce is complex, particularly when children’s inheritances or trusts are involved. Whether you’re a parent concerned about your child’s financial legacy or a spouse seeking to protect your own trust assets, you need experienced legal counsel to navigate the intricacies of children’s inheritance in divorce and trust protection strategies.
At Wilder Mahood McKinley & Oglesby, we’ve helped countless individuals in high-asset divorce cases take proactive steps to secure what matters most. Our team understands how to balance family protection with legal precision—ensuring the next generation’s financial future remains intact.
Contact us today to discuss how we can help you safeguard your children’s inheritance and protect long-term family wealth during divorce.
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