top of page
Search

Protecting Your Children's Assets

  • Writer: Candace E. Duecker, CFP®, CDFA®
    Candace E. Duecker, CFP®, CDFA®
  • May 19, 2019
  • 2 min read

Minors are generally observed to lack the capacity required to enter into contracts; therefore, it is not uncommon for a parent or legal guardian to help a child acquire property until they are able to do so independently. The more common assets that tend to fall into this scenario include:

  • Financial accounts, such as bank and brokerage

  • College savings accounts

  • Vehicles

It is easy to assume that what has been opened/acquired in a parent's name but merely set aside and understood to be for the benefit of children will remain that way after the divorce has been finalized. The truth is, that it is not always the case when left to assumptions and absent proper legal support. Imagine you set up a 529 account for your child/ren during your marriage in which your ex-spouse remains the custodian post-divorce. Your ex-spouse later remarries and begins to build a new family. As custodian of the 529, they decide to change the beneficiaries of the account to support the college funding goals for their new family only to leave you to figure things out for the child/ren you shared together. You can probably see where we're going with this - financial accounts could be withdrawn or liquidated, vehicles could be sold, etc.

It is important to note that some accounts are inherently more protected, such as those titled in trust and/or UTMA (Uniform Transfers to Minors Act) as there is a fiduciary standard that must be met. However, in general, it is just not enough to assume an ex-spouse wouldn't sacrifice the relationship with their child/ren for personal financial gain. Too often, I see the topic of child/ren's assets not get the attention it deserves; therefore, any time I am working with a client who is designating assets for their child/ren, we are sure to address this comprehensively with their attorney to increase the chances of avoiding a worst case scenario. Every situation is unique, so you'll want to talk with your attorney to determine the best way to protect your child/ren's assets in your divorce. Your attorney should be able to recommend the proper framework needed for each type of asset and they will be able to draft the language necessary to make it most effective.

______________________________________________________________________________________________

©2019 SoulFINANCIAL LLC

This information is not intended to be, and should not be construed as, investment, legal or tax advice. You should consult with a qualified financial professional or attorney for advice specific to your situation. Past performance is not an indicator of future results.

Information and recommendations contained in SoulFINANCIAL's commentaries and writings are of a general nature and are provided solely for the use of SoulFINANCIAL, its clients and prospective clients. This content is not to be reproduced, copied or made available to others without the expressed written consent of SoulFINANCIAL.

These materials reflect the opinion of SoulFINANCIAL on the date of production and are subject to change at any time without notice. Due to various factors, including changing legal environment, market conditions, or tax laws, the content may no longer be reflective of current opinions or positions.

Featured Posts
Recent Posts

SoulFINANCIAL LLC | mobile 253.243.0924 | candace@soulfinancial.com | Seattle/Tacoma

© 2017 - 2025 by SoulFINANCIAL LLC.

All rights reserved.

The information contained in SoulFINANCIAL's website are of a general nature and is for informational purposes only and does not constitute financial, tax or legal advice. These materials reflect the opinion of SoulFINANCIAL on the date of production and are subject to change at any time without notice due to various factors, including changing market conditions, legal environment, or tax laws. Where data is presented that is prepared by third parties, such information will be cited, and these sources have been deemed to be reliable. Any links to third party websites are offered only for use at your own discretion. SoulFINANCIAL is separate and unaffiliated from any third parties listed herein and is not responsible for their products, services, policies or the content of their website.

bottom of page