Protective Inheritance Trusts

Jack E. Stephens wrote the Protective Inheritance Trust (PIT) provisions in 1999 and has updated them over the years. Recently, he copyrighted these provisions based on proprietary legal work and their uniqueness to his Family/Living Trust.

The Problem: In 1999 I was notified by two (2) separate beneficiaries of deceased clients of the loss of their inheritance. A son had placed his inheritance of about $1 Million in a marital, joint account with his wife. Two years later the wife sued for divorce and claimed one-half of the funds as community property. There was a contested divorced and the Court ruled that the son had made a gift to the community property estate and awarded one-half of the marital account to the wife.

In a separate matter, a daughter had sold a rental property she had received as an inheritance and received about $800,000.00. She also placed this into a marital bank account. A few years later, her husband was sued in his business and a judgment creditor was awarded all of the community property of the couple. As a result, the daughter lost all of her inheritance.

How our unique PIT provides benefit to you and your family:

1. Your child’s or other beneficiaries’ inheritance is protected from divorce, lawsuits and creditors at your death;

2. Such inheritance is protected from divorce and lawsuits against your child’s spouse for years subsequent to your death;

3. Since the implementation of the PIT provisions in 2000, our office has received no notice of the loss of an inheritance by a beneficiary;

4. Your child has absolute control of his/her inheritance and may withdraw funds for the needs of his/her family; and

5. *The PIT will provide mental comfort for you as the parent and for your children in knowing that the inheritance will be protected.