Protecting Family Assets from an Inheriting Child’s Divorce

 Posted on July 24, 2025 in Divorce / Family Law

Parents who have worked hard to build wealth often want to ensure their children are financially secure. However, when an adult child goes through a divorce, there is a risk that family assets inherited by that child could be divided with their spouse. In Illinois, there are legal tools parents can use to help protect their child’s inheritance from becoming part of a divorce settlement. Contact our Oswego, IL estate planning attorney to learn more.  

Can an Inheritance Be Divided in a Divorce in Illinois?

In Illinois, inheritances are generally considered "non-marital property." This means they belong only to the spouse who received them and do not have to be divided during a divorce. However, an inheritance can lose its non-marital status if it is commingled, or mixed, with marital assets.

For example, if an adult child deposits inherited money into a joint bank account with their spouse or uses inheritance funds to improve the family home, the inheritance may be considered marital property.

How Can Parents Protect an Inheritance?

If you want to make sure your adult child’s inheritance stays within the family, you can take proactive steps to shield it:

• Leave assets in a trust. A properly drafted trust can keep inherited assets separate from a child’s marital property. The trust can specify that distributions are made at the trustee’s discretion rather than given outright to the beneficiary. This helps avoid situations where inherited funds are deposited into joint accounts or used for shared expenses.

• Include spendthrift provisions. These provisions prevent a beneficiary from transferring or pledging their interest in the trust, which can protect against claims from a divorcing spouse.

• Work with an estate planning attorney. An experienced attorney can draft trust documents tailored to your family’s situation and Illinois law, reducing the risk of future challenges.

Can I Protect a Future Inheritance if My Child is Already Married?

If your child is already married, you can still use a trust to protect family assets. However, the trust must be carefully structured to avoid appearing as though it was designed to defraud a spouse. Your child and their spouse can also enter into a postnuptial agreement that defines inherited property as non-marital. We can help with prenuptial and postnuptial agreements.

Should I Discuss My Estate Plan With My Child?

Some parents hesitate to talk about estate plans with their children. However, having an open conversation can help your child understand why certain protections are in place and how to manage inherited assets responsibly. Your attorney can guide you in balancing transparency with privacy.

Contact an Oswego, IL Estate Planning Lawyer

To learn how to protect family assets from an inheriting child’s divorce, contact a Kendall County, IL estate planning lawyer at Loire Krajniak Law, LLC. Our firm offers free consultations and can help you create a strategy that keeps your hard-earned wealth within your family for generations.