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Monday, October 21, 2013

How can I make sure that my daughter-in-law gets none of my son's inheritance?

Recently I had a conversation with a client I'll call Doris, who told me that she is not particularly fond of her daughter-in-law. Doris's reason for consulting me was to find out how she can leave her estate to her son without her daughter-in-law getting any of it. It might surprise you just how many parents bring up this topic. I encourage my clients to speak openly about any and all concerns that might relate to their estates, and this is certainly one that is mentioned frequently. Because of its frequency, I thought other readers might be interested in hearing about the topic.

The first thing for anyone in Doris's situation to understand is that if you leave your estate outright to your son or daughter, there is absolutely nothing you can say in  your will to prevent him or her from sharing that inheritance with his or her spouse. Also, there is nothing you can say or do to prevent some or all of that inheritance from going to the spouse when your son or daughter dies, or they get divorced. There is nothing you can say or do to prevent that surviving spouse from marrying someone else and leaving the money to his or her new spouse and not to your grandchildren. Once you give money away, you can't control what someone else does with that gift.

That probably isn't what you want. It certainly wasn't what Doris wanted. I thought she might faint when I mentioned her daughter-in-law possibly marrying someone else and the inheritance going to that new family.

So, let's look at a solution.

In Canada, money that is inherited is generally exempt from division if a husband and wife should get divorced. In some provinces, the legislation allows for a clause to be put into a will confirming that any inheritance under the will is not intended to become family property. However, there are two problems with this as a solution to Doris's situation.

The first is that if Doris leaves money to her son and he uses the funds to buy something that is put into joint names, such as a home, the funds are in jeopardy. At best, there would be endless legal wrangling and calculations to figure out whether some portion of the home should be bought out by the daughter-in-law, and at worst the funds would simply be gone. Similarly, the son might spend the money on gifts for his wife such as expensive jewelry, or on vacations for both of them.

The second problem is that this only covers divorce. It doesn't do anything at all in the event that Doris's son dies and leaves his estate to his wife.

The answer to this situation is simply a trust. The inheritance for Doris's son should be placed in a trust when Doris passes away. Nothing needs to be done with the money right now; the trust doesn't get set up until Doris has died and her will comes into force.

When Doris's will is written, she will have the opportunity to decide when and why money will be parcelled out by the trustee to Doris's son. It could be set up so that her son would receive a set amount of money each month or year. However, Doris indicated that she would like to restrict her son's access to funds, and limit him to receiving funds only for emergencies, or for education expenses for Doris' grandchildren. This is easily written into a will; trusts are very flexible.

Using a trust, Doris can ensure that:

  • if her son and daughter-in-law should get divorced, her daughter-in-law won't get half of the funds.
  • if her son passes away, the funds in trust won't go to his wife. Doris wants the trust set up so that on her son's death, any funds remaining in trust will go to her grandchildren.
  • the daughter-in-law will not become trustee of the money for the children. Doris is naming a trust company to manage the trust for her son, and if necessary the grandchildren.

There are always drawbacks to any solution. In this case, the drawbacks may be small compared to what is being accomplished, but it's important for anyone in Doris's situation to know what he or she is getting into. The drawbacks to using a trust to hold the inheritance are:

  • many lawyers charge more to draft wills that have trusts in them.
  • there is a cost associated with paying a trustee to manage the trust, as someone has to manage the money, prepare the tax returns, and send out the payments to the son.
  • most importantly, Doris's son will never receive a large sum of money, and will never have the opportunity to use his inheritance to make a large purchase such as a cabin.

Taking all of these factors into consideration, a trust is the best tool available for this tricky family situation.


  1. Thank you for this. My daughter in law is SATAN incarnate, I hope that my son wises up and gets rid of this evil evil woman before I pass away.

    1. Oh dear. I'm sorry to hear that. At least now you know that a lot of other mothers feel similarly towards their sons' wives.



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