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How to divorce-proof assets you leave to your children

Many people develop estate plans that are designed to ensure that the family's assets remain in the family. Divorce can take a big chunk out of a family's wealth when a spouse gets a share of an adult child's money. That's why some parents choose to leave money to their children using trust funds.

Those trusts need to be carefully set up. Further, the beneficiaries need to avoid commingling the assets in those trusts with marital assets. It's best not to touch the funds in the trust, even if you're able to. However, if you do, don't place them in a joint account or use them to redecorate a home that you own together if you want to keep your trust assets separate. Doing so can make the entire trust marital property that the spouse can seek a portion of in the divorce.

One way that parents can protect a trust that is set up for an adult child from being up for grabs in a divorce is to set it up as an irrevocable trust that the beneficiary doesn't have access to -- even via the trustee. As one trust professional says, "You can only attach what that person has access to."

Another way to protect money that's in a trust is to include it in a prenuptial agreement when you marry. You can stipulate that the assets in the trust belong solely to the spouse who's the beneficiary in a divorce. Again, it's still wise to avoid commingling those assets with marital assets during the marriage.

Another type of trust that can become a source of dispute in a divorce is one set up for a couple's children. If the language of the trust isn't specific enough, the assets could potentially be accessed by either or both of the divorced spouses' children from later marriage or relationships. That can be easily avoided by setting up individual trusts for each child or stipulating that a trust is only for children that the couple has together.

Experienced Arizona estate planning attorneys can help people anticipate a wide variety of potential scenarios -- even ones they'd rather not think about it. This can help ensure that your money goes only to the people whom you intend to inherit it.

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