Using a revocable trust when you dont want your son-in-law or daughter-in-law to get your money

Attorney Tom Olsen: I've been a lawyer for 41 years, I've done thousands and thousands of wills and trust, and I would say less than 10 times has somebody said to me, "Tom, I'm leaving everything to my kids, and if one of them happens to die before me, I leave it to that child's spouse, husband, or wife, my son-in-law or daughter-in-law." What I'm saying is, less than 10 times has that happened. Very, very unusual.

Holley: That is, actually.

Attorney Tom Olsen: I don't blame them. Most people have children who have children, and their will or trust says, "If my child dies before me, I leave it to his or her children, my grandchildren." Makes perfect sense. Occasionally I have a client that comes in and says, "Tom, I'm leaving a portion of my estate to my son, but I want to make sure that his wife never gets a penny of that money."

Holley: That, we hear all the time.

Tom: It's pretty common.

Holley: The parents don't want the spouse of the child to get anything. Nothing, have no decision making ability.

Tom: Here's what I tell them. I say, "Look, if you leave a share of your estate to your son, and you pass away, that money is his to do with as he pleases."

Holley: Absolutely.

Tom: If he someday he may pass away, and if he dies before his wife, whatever he is got left over of your money, it's probably going to his wife. I do tell him this though, that, "If this is important to you, then you can have a quiet conversation with your son and say, "Look, son, I talked to my lawyer, Tom Olson. He says that when we pass away, and you inherit wealth from us, if you keep that wealth in your name only, and a bank account in your name, or if you bought a piece of property, the property in your name, and you get divorced in Florida, you're going to leave with it".

Holley: Absolutely. Do not co-mingle that money.

Tom: That's right. If you take that wealth and you put it into a joint account with your wife, or you buy a home, and you put the home into the wife's name too, and you get divorce, she's going to leave with one half of it.

Holley: It will happen.

Tom: I would be curious to know in my 41 years of practice, how many, and I bet it's a bunch, of parents that have actually had that conversation with their kids. I'm saying it's very likely they have.

Holley: I can say I have friends where that conversation's taking place with the friends. You're going to inherit everything I have, son, but I don't want your wife getting a dime.

Tom: That's how it's usually handled. Usually people mostly say, "I'm comfortable with that". Sometimes they say, "Tom, that's not good enough." .We have to resort to this and it says, okay, when we pass away, whatever share was going to my son, he does not get it outright, it will remain in trust for him, either until he dies, or he divorces that woman.

Holley: The latter has come across, yes, divorce.

Tom: I have literally put that language in people's trusts. Clearly, it's very important to them. I've never seen a situation where mom and dad have passed away, and the son or the son's wife read that language and saying, "Oh my God, that's hateful", or maybe it's legitimate, I don't know.

Holley: Sometimes, depending on the conversations we have with our clients, we get a little bit of an insight into the drama in the family, if you will, and sometimes it comes from that. There's an incident that happened, or there's a situation happening, and it gives parents a reason to come to talk to you to begin with, say, "Hey, we were thinking, we pass away, our son's going to get this, but there's this situation with the wife or with the husband right now that we don't think is conducive to him getting that money."

Tom: There are people, clients in all situations that want to tell us about the family drama. I'm more of a like just facts ma'am.

Holley: Give me the highlights.

Tom: Exactly. I try and avoid it, but these clients that have come to us over the years, they may have some very good legitimate reasons for doing what they're doing, I don't necessarily know what they are.

Holley: It's interesting, because I am the opposite. You can give me the highlights, but then I'm sitting there because I love stories.

Tom: Do you?

Holley: What happened? Then I step into it. It's the balance.

Tom: That's the differences between you and me. We're both very good at what we do, but we approach it in different ways.

When I have done these trust for people that say, "My son share shall remain in trust for the rest of his life, or until he divorces that woman," I don't literally done those trust before, but I've never told the client this, but I've been curious about this situation. Mom and dad have passed away, son's share is being held in trust. He goes to his wife and says, "Honey, you know what? Let's get a friendly divorce. That way I can get all my money, then we can get back together."

Holley: Get remarried.

Tom: I'm not putting qualifiers on that to say, if he gets divorced and stays divorced from her for a number of years. I've not gone that far.

Holley: It's probably coming.

Tom: Clients, they might be out there thinking, "Oh, that's what--"

Holley: That's what we need to do.

Tom: "Tom, I want that kind of trust. You know that one you were talking about," but not only does he got a divorce that woman, he's got to stay divorced from her for at least five years before he gets my money. I'll do it, if they ask me to, I'll do.

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