In-laws can either bring great joy or great frustration.
Family dynamics range from contentious at best to primarily peaceful.
Sometimes parents never approve of the spouses their children choose.
As my mother-in-law teased, “Behind every successful man is an amazed and astonished mother-in-law!”
Other families feel like they gained a new beloved child each wedding day.
According to a recent Yahoo article titled “Can I Leave Inheritance Money to In-Laws?,“ the topic of money can intensify any of these dynamics.
Estate planning should address your wishes, whether you love or hate your in-laws.
Without an estate plan, inheritance laws direct who receives what assets from an estate.
Although states have intestate distribution laws, these generally prioritize spouses, children, and other blood relatives over in-laws.
If someone inherits through intestate laws, their spouse may or may not partake in the inheritance.
To provide for your in-laws with an inheritance by design, you must create an estate plan and designate them as heirs in your last will and testament or funded revocable living trust.
Although some people specifically want to provide for the spouses of their children, others prefer to exclude their sons-in-law or daughters-in-law.
This is especially true when there are grandchildren.
When inheritances are distributed outright to heirs, it is nearly impossible to ensure your in-laws will not benefit from the inheritance.
Instead, inheritance trusts, whether “testamentary trusts” created under a last will or irrevocable trusts created under a revocable living trust, are commonly used to control inheritance distribution.
This control can last multi-generationally, too.
With the trust, you can leave assets to family members while including provisions to exclude those not related by blood from receiving assets.
I have found an extremely flexible way to include in-laws that can be revised on the fly.
What is it, you ask?
Include them as beneficiaries of your retirement funds.
Unlike your last will or revocable living trust, if you change your mind in the future, revise the beneficiary designation forms on file with the institutional custodian of your retirement accounts.
What if you have concerns about the financial responsibility of your in-laws or their intentions before the marriage?
Encourage your children to sign prenuptial agreements.
In this document, you can request language to govern how inheritances will be handled.
These same protections could be included in a postnuptial agreement after the wedding.
Using a prenuptial or postnuptial agreement is beneficial if divorce is likely.
Because no family is the same, you should work with an experienced estate planning attorney to discuss your wishes for your loved ones.
Reference: Yahoo (Jan. 8, 2023) “Can I Leave Inheritance Money to In-Laws?“