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How to Protect your Children’s Inheritance When Divorced

October 15, 2022

Let’s examine a scenario all too common for divorced parents and their children. Imagine you just finalized the divorce from your spouse. Your retirement plan from work and your life insurance policy are the largest assets you own, and you have designated your two minor children to receive the money from these accounts when you pass. Your divorce was rather nasty, so of course you do not want your spouse to receive or manage the money in these accounts after you’re gone. They cannot be trusted to pass the money down to your young ones.

You pass away one year later. Both of your kids are still under 18, so in order to receive any assets from your retirement or insurance plan, an adult must be appointed to collect it on their behalf. Of course, the court’s obvious choice of who will take management of the assets is the living parent of your children: your ex-spouse. In Nevada, the caretaker of the money is called a guardian. The guardian has complete control over the funds since your children are not legally able to manage significant assets.

Most often, the loved ones of divorcees bare the brunt of their poor use of estate planning tools. While naming beneficiaries to receive your insurance or retirement assets has good intentions tied to it, these basic tools are often rendered useless by the complexities surrounding dissolved relationships. With the proper planning tools, there are means to fully protect your children’s inheritance against the unknowns.

Update Estate Plans

Adopting a Trust

A trust is a powerful tool that lets you direct and control your estate in ways no other life plan process can. Trusts enable you to manage property while you’re alive, then quickly transfer it upon death. The trust is comprised of a few main players. The person that sets up the trust (you) is often called either the Trustmaker, Grantor, or Settlor. Next is the Trustee, who manages the trust’s owned assets. Usually, you’re the Trustee during your life, then you appoint someone else as trustee to manage the assets when you’re no longer able. Finally, there are the Beneficiaries. These are the people you designate to receive the benefits of the trust (often your children and close loved ones).

Trusts: Protecting Your Children’s Inheritance After a Divorce

A trust protects your children’s inheritance in a few ways:

  • A trust gives you the power to select the Trustee, meaning you can choose someone other than your ex-spouse to manage any assets after you pass. If compelled, you can even specify that your ex-spouse is never permitted to be a trustee. This ensures that the person you designate is truly to be trusted with transferring the inheritance to your children when they are of age.


  • The ability to select the Beneficiaries is key. You can even lay out how you’d like the assets in the trust to be used by them. For instance, maybe you want them to go to college or put money towards their first home. Your intent ensures your legacy is used by your children and loved ones in the manner that you want, rather than be mismanaged or quickly squandered. It also protects it from the whims of an ex-spouse or court opinion on how it should be used.


  • Probate is a public, lengthy, costly process. A fully-funded trust avoids it entirely, saving your intended beneficiaries money on legal and court fees. Without a trust, “plain” beneficiaries may have to navigate such instances as guardianship and conservatorship cases. A little bit of planning to set up a trust will save a lot of energy when the unexpected occurs.

Recently Divorced? Contact AD&R to Set Up a Trust.

Gaining full control of how you’d like your legacy to be utilized by you beneficiaries is crucial, especially after divorce. Even if you are wondering whether to update estate plans, Anderson, Dorn & Rader can help to map your trust assets with a comprehensive life plan. We are Reno’s trusted estate planning lawyers. Give us a call or set up an appointment to speak with our knowledgeable staff today.



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