Family law/estate planning question

Not too sure what specific category this question is but I'm sure it touches some sort of family law and estate planning. My sisters and I are quite lucky as we receive gifts/"dividends" from our parents through our family business. We receive mid 6 figures yearly on the grounds that we invest in real estate (my parents are property developers and prefer real estate over any asset). As such, my sisters, who all just recently married, all signed BFA's/prenups with their husbands with no contentions. We all have wills as well. Obviously my parents know that the husbands will have benefits from it and will benefit the future grandchildren and my sisters.

Now my parents are questioning whether to continue giving out incentives as they are questioning where this money will go in the event if any of my sisters, or me if I get married, dies or separates from the spouses. The premise is that my parents want the money to stay within the bloodline (us and the grandchildren) and not any subsequent relationships or kids with other partners, if worst comes to worst. (e.g. if I die, my parents don't want the funds to go my wife especially if the wife marries a new person and have kids with that person. And if we have kids, my parents want the money to benefit our kids mostly)

It was easier just before their marriages because there was a clear separation of who owns who before the marriage but obviously the equity and funds will be contaminated during the marriage as we do our financial planning.

Obviously my parents, as much as they're ok with the spouses, don't fully trust them. I also get where they're coming from as they literally started from poverty in a third world country and got to the security they have now, whilst friends and family tried to screw them over multiple times. What would be the best solution moving forward if my parents continues to provide incentives?

 

I take it they are receiving trust distributions?

If so it is a personal asset of the recipient and not of the parents. It they are married it could end up being a joint asset with their spouse which might go to the spouse if they die - depending on how they are structured.

If your parents want them to benefit but control things they might want to look at getting the trust to distribute elsewhere and then have that entity lend the children money, as an interest free loan, perhaps mortgaged.

That way it is not an asset of the child.
But there are a lot of other issues with this and the parents should take their own legal advice.

 

Thanks Terry. The idea of a trust is pretty smart.

We get straight up cash to invest. Is there a way of the funds not becoming a joint asset? Also in the case of my sisters, if they decide to be stay at home mums and get the husbands use the equities from previous properties, is there a way to protect this in the scenario I pointed out?

Also, what other issues should my parents look into?

Thank you!

 

Bloodline testamentary trust might be an option if the assets are owned by the parents directly or in companies where shares are held the parents, but not if the business is owned by trustees of trusts? @Terry_w

this doesnt mean anything. Is it a loan? Dividend? Trust distribution?
op, you dont know enough to ask all the necessary questions. Find a good lawyer.

 

Yes

Protect what?

I don't know the situation so not for me to advise them through a 3rd party. They should seek their own legal advice.

 

only assets of the estate of the deceased person can fall into a testamentary trust. A blood line trust will mean the spouses are not included as beneficiaries but it doesn't make them less attackable.

 

So my view is there needs to be some element of goodwill to go along with all the legal things. Also when I am dead I can’t really be involved if my kids get hammered by some gold digger. I don't intend to turn in my grave.

But I know a good clean legal answer ( trust etc) makes sense.

 

Given you are earning mid 6 figures as per your OP, then you should get your own legal advice. But you should assume that what what your parents are thing about and what your partners are thing about, are two completely different things...(just guessing, mind you...)