AT WHAT AGE SHOULD HEIRS INHERIT?

SOURCE: RECER EXPERIENCE.

A Baltimore lady came in for estate planning in 1991. At 74 years of age, she was ready to plan her estate so that her two daughters would receive everything.

Assuming she was a widow, I inquired to be sure.

"No. I'm not a widow," she said matter-of-factly. "My divorce will be final next month."

She was getting a divorce at age 74!

She wanted me to show her how to create trusts to keep her daughters from losing their inheritance in a divorce.

We proceeded to design trusts for her two daughters. When we came to the decision point about how long to make the trust last, she said, "How long shall I wait to give it to them outright? Until they are 35 or 40?"

I politely pointed out, "You are 74 and going through a divorce. Maybe you should make it a little later. Maybe you should make it last until you are quite sure they would be finished with any domestic differences."

She smiled and said, "You're right. Let's make it 65."

If your family's possible divorce is a concern to you, you can create a trust and fund it with your assets. The trust can pay out benefits to them for a period of years ... and, at the end of the trust, they can receive the entire corpus ... or body ... of money.

Better to err on the side of conservatism. Better to leave the assets in the trust for a long time ... than to allow them to take the money out, to mix it into their marital estate, and then to lose some or all of it in a divorce.