How best to protect inherited money in the event that my spouse is sued?

I inherited $400K from my father several years ago and for simplicity purposes it was put into a joint account. My wife acknowledges that this money was purposely meant for me and that she would inherit it upon my death through a Will that is in place. Even after extensive treatment, she continues to receive DUI’s. We have 3 minor children and she is actually the primary breadwinner now and I take care of kids. If I were to put this money in my name alone, would it be protected from plaintiffs in legal action or would all of my personal assets be subject to them? We have $1.3M in liability insurance which wouldn’t go far.

Asked on January 5, 2011 under Bankruptcy Law, Florida

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Ok, you need to go and sit down with someone to do a little estate planning here.  I understand about the whole agreement about the money and the Will but for all intensive purposes you co-mingled the money here and now it looks like it is marital property.  So yes, I would speak with someone about taking it out and putting it in your name alone, although I think you may have messed that up here.  You should also talk to someone about placing you personal assets - all of them - in a trust for the benefit of the children, possibly irrevocable given the circumstances here, and the legal ramifications of it all. Possibly give you and your wife a life estate in the house. Something to protect you "in case."  Get help now.  Good luck.


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