What is the best way to leave any assets or life insurance to my domestic partner who is a felon & owes restitution? - Estate Planning Law Questions and Answers- LawQA.com

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What is the best way to leave any assets or life insurance to my domestic partner who is a felon & owes restitution?

My partner and I were married in MA in 2005. My partner has a daughter who is now 22 years old. I have been in her life for 12 years and have raised her as my daughter also. Unfortunately my partner was convicted of embezzlement and is in federal prison. She will owe a large restitution when she gets out. I have life insurance, 401K, property..etc. Originally I had my partner as the beneficiary for everything. She will now have restitution hanging over her for a long time and I changed the beneficiary to our daughter for fear it would be taken. How do i protect any money, life insurance, property etc so my partner receives or can access what i would leave so it could not be taken away? Our daughter would need to be taken care of until her mother gets out. Is there a way to keep this money safe from being taken by the IRS or have to go toward restitution. I need to know she will be provided for once I am deceased.

Horn & Johnsen SC
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Your objectives can all be accomplished by creating an asset protection trust for the benefit of your partner and daughter. If structured properly by an experienced estate planning attorney, the assets of the trust can be available for the needs of your partner and daughter during their lifetimes at the discretion of an appointed trustee and would be protected from their creditors. This trust would "spring" into existence upon your death and can be created through a revocable living trust or even by virtue of a testamentary trust created under your will. Once the asset protection trust has been established within your estate planning documents, you can then name this trust as the primary beneficiary of your life insurance policies and 401k plan. All other assets, after your final debts and expenses have been paid, could pass to this trust outside of probate through your revocable living trust or through the death probate process if you have a will-based estate plan. Each state has very specific laws regarding asset protection trusts, so it is essential that you consult with a qualified estate planning attorney to ensure your estate planning documents will ultimately accomplish your objectives.

Answer Applies to: Wisconsin
Replied: 3/19/2014

Answer By Dara Goldsmith
Goldsmith & Guymon
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You need to speak with an experienced estate planning attorney about setting up a spendthrift trust and address other options if appropriate. This information is only intended to give general information in response to an inquiry. It does not establish an attorney client relationship. This response is only based upon the limited facts presented and is merely intended to assist you in determining if you should contact an attorney to provide you with legal advice.

Answer Applies to: Nevada
Replied: 3/17/2014

Answer By Ronald K. Nims

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The way to provide for the daughter and your partner is to set up a trust for your assets. The life insurance policy should show the trust as the beneficiary. The trustee must have the power to provide support for the daughter and the partner at his/her discretion and to allow the daughter and partner the use of trust assets without giving the assets to them. For example, if your partner needs a car, the trust can buy a car and own the car while allowing your partner to drive it. If the trust buys a car and gives it to your partner, her creditors could seize the car, but if the trust retains ownership of the car and merely lets her use it, the creditors can't touch it.

Answer Applies to: Ohio
Replied: 3/15/2014

Answer By Jeffrey T. Reed

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The best way would be to put the assets in trust for the health, education, and maintenance of both you partner and her daughter. I would find someone you trust to act as trustee.

Answer Applies to: California
Replied: 3/15/2014

Answer By Bruce Steiner

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If you provide for her (in your Will) in trust rather than outright, her inheritance will be protected against her creditors.

Answer Applies to: New York
Replied: 3/14/2014

Answer By Victor Waid
Law Office Of Victor Waid
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Suggest you consult with an estate planning lawyer who will probably advise the preparation of a trust with supporting documents.

Answer Applies to: California
Replied: 3/14/2014

Answer By Christine James
James Law Group
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You need an experienced estate attorney to put it in trust for them with a 3rd party trustee.

Answer Applies to: California
Replied: 3/14/2014

Answer By Thomas E. Gates

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You asked this question yesterday.

Answer Applies to: Washington
Replied: 3/14/2014

Answer By Brian Haggerty
Minor, Bandonis and Haggerty, P.C.
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There is no completely certain way to avoid the restitution. You could put some of the money in a trust for your partner, but a determined creditor, even if it couldn't reach the principal, could get an order attaching any money or property that was distributed from the trust. You could leave all to daughter, and trust her to take care of Mom.

Answer Applies to: Oregon
Replied: 3/14/2014


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An asset protect trust sounds like it would be your best bet and would accomplish everything you are trying to do. Look for an Estate Planning Attorney in your area.

Answer Applies to: New Mexico
Replied: 3/14/2014

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