Can I Leave Inheritance Money to In-Laws?

When someone passes away, whether unexpectedly or not, it can raise questions about who will inherit what. Specifically, you might be wondering whether in-laws have a right to any of the assets of the deceased person. The short answer is that state inheritance laws prioritize spouses, children and other blood relatives ahead of in-laws. However, the way those individuals choose to handle their share of an inherited estate can determine whether an in-law receives assets from it.

A financial advisor can help you create an estate plan for your needs and goals.

Who Can Inherit When Someone Passes Away?

State inheritance laws define who can be an heir to an estate. Generally, heirs are people who are directly related to the deceased person, either by marriage, blood or adoption. In order of priority, people who can inherit from someone under state law include:

• Spouses

• Children

• Siblings

• Parents

• Grandchildren

• Aunts and uncles

• Cousins

States generally do not make any specific provision for in-laws. However, it’s still possible for an in-law to receive part of an estate later on if they’re married to a direct heir.

Can You Leave Money to In-Laws?

You can leave money or other assets to in-laws if you’d like them to inherit from your estate. The simplest way to ensure that they receive part of your estate is to include specific instructions for what they should inherit in a will. You could also create a trust for the express purpose of passing on assets to in-laws.

For example, say you have two children who are both married. You might choose to leave $50,000 to each child and will $10,000 separately to each of their spouses. By including this provision in your will, you can specify exactly how much of your estate your in-laws should receive directly.

Likewise, you could establish a trust and name your in-laws as beneficiaries, alongside your children and anyone else you’d like to benefit from the trusts. Trusts give you an added layer of control when leaving money to in-laws, as you can set the conditions under which they’re able to receive their inheritance.

Can In-Laws Inherit From You Indirectly?

It’s possible that an in-law could inherit part of your estate indirectly through their spouse. If you leave money to your son or daughter, their spouse would generally be entitled to receive at least a portion of their assets should they pass away. That would be true whether your child had a will in place or not as state inheritance laws automatically defer to spouses.

Even if your child did have a will, they could not use it to exclude their spouse from inheriting. State laws do not permit the exclusion of spouses unless the spouse gives their express written permission. Children, on the other hand, can be written out of a will if state law allows it.

What if your child predeceases you? In that case, your in-law would still be able to inherit any assets that belonged to their spouse. They would not, however, inherit anything from you unless you included a provision in a will or trust granting them part of your estate.

How Do You Protect Inheritance From In-Laws?

While some people may want to leave something to a son or daughter-in-law, others may prefer to exclude them from inheriting entirely. That may be the case if relationships are strained, or they believe that their in-law is likely to misuse any assets they might inherit.

There are a couple of ways to protect an inheritance from in-laws, starting with establishing a trust. For example, you might create a family trust which allows you to leave assets to family members. The trust terms can specify that anyone who is not a blood relative can be excluded from receiving assets.

Encouraging your child to draft a prenuptial agreement is another option. A prenup could include wording that specifies how any assets you pass on to your child should be handled, both during your lifetime and beyond. You could also ask them to consider a postnuptial agreement once they’re married, which could dictate what happens to their assets (and anything they’ve inherited from you) should they end up getting divorced.

Proper estate planning can help you and your heirs avoid conflicts or issues over who gets to inherit what. Talking to an estate planning attorney or financial advisor can help you develop a plan that fits your needs.

Inheritance and In-Laws FAQs

Every family situation is unique, and you might have questions about where in-laws fit into your estate plan. There are different scenarios that can raise uncertainty over how an estate will be divided when there are in-laws in the picture.

If my daughter died, will my son-in-law inherit my estate?

If your daughter predeceases you, their spouse would not be able to inherit anything from your estate unless you name them as a beneficiary in your will or trust. A surviving spouse would be able to inherit from your daughter, however. If you passed on any of your estate assets to her during her lifetime, those could subsequently pass to her spouse.

How can I leave money to my daughter but not my son-in-law?

If you’d like to leave money to a daughter (or a son) while excluding their spouse from inheriting, establishing a trust may be the best way to do it. You can set up a trust and name your child as the beneficiary, then include instructions as to how the trust assets should be managed on their behalf. You can also name the trust as beneficiary to retirement accounts or a life insurance policy, where they can be administered by the trustee rather than being passed to your child directly.

Can a daughter-in-law be a beneficiary?

A daughter-in-law can be named as a beneficiary to a will or trust if you desire it. You could include a provision in either document stating that your daughter-in-law must be married to your child at the time you pass away in order to receive an inheritance from you.

Can a son-in-law or daughter-in-law challenge a will?

Will contests can be problematic and delay the probate process. Unless a son or daughter-in-law was expressly included in your will, they have no legal right to challenge it. Typically, only spouses, direct heirs and individuals named in a will have legal standing to contest its terms.

Bottom Line

In-laws can add a wrinkle to the estate planning process and it’s important to understand what rights they might have to your assets. If you’re an in-law, it’s also helpful to know what assets might eventually pass to you should your spouse pass away before you do. That can make it easier to create a long-term generational plan for transferring wealth.

Estate Planning Tips

• Consider talking to a financial advisor about your estate plan if you’re concerned about what an in-law may or may not be able to inherit. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

• If you don’t have a will in place yet, that’s a good place to start with estate planning. You can work with an estate planning attorney to draft a will or create one online using a simple will-making software program. Having a will in place is important, even if you have a relatively simple estate, for ensuring that your assets go where you want them to once you pass away. You can also use a will to name a legal guardian for minor children.

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