Divorce can get complicated, especially with asset division. But with separation, you might worry about your spouse claiming assets for your children. California law provides ways to protect your estate and ensure it goes to your chosen beneficiaries. Let us look at some practical strategies to safeguard your children’s inheritance.
What can you use to protect your assets for your children?
A living trust helps protect your assets. You transfer property into a trust to remove it from your personal estate. This way, your estranged spouse can’t claim it during divorce. There are different types of trusts, including:
- Revocable trusts let you control your assets while you’re alive
- Irrevocable trusts give stronger protection but less flexibility
- Spendthrift trusts stop a beneficiary from wasting their inheritance and protect the trust’s assets from creditors
Each type gives different levels of protection and control. Another strategy is updating beneficiary designations on life insurance policies, retirement, and investment accounts. In California Probate, these designations usually override your will. Name your children as beneficiaries to ensure these assets pass directly to them. This bypasses your estate—and your estranged spouse.
How can you protect your business interests?
If you own a business, you should protect it. Consider these options:
- Buy-sell agreements stop your estranged spouse from taking control of your business.
- Family limited partnerships help you keep control while you reduce your ownership stake. This limits your spouse’s claim on the business during a divorce.
Remember, California is a community property state. Assets acquired during marriage usually count as community property. However, with the right planning, you can protect your children’s inheritance from potential claims by an estranged spouse.
What’s your next step in securing your children’s future?
Planning your estate when you are separated can be tricky. There is no hard and fast rule to do it, and your case is different and needs careful thought and legal know-how. This information is a starting point, but you should get tailored advice. An experienced attorney can look at your situation and help you create a plan to protect your assets and ensure your children inherit what you want.