Back in the 1930s Joe and Rose Kennedy wanted the kids inheritance protected from five major possible attacks: (1) law suits (2) divorce (3) making sure that Kennedy wealth went only to Kennedy descendants and not gold digging son-in-laws and daughter-in-laws who could remarry after the death of a Kennedy descendant and spend Kennedy wealth on a replacement spouse (4) living and death probate and (5) estate taxes. In order to accomplish their goals, they set up a living trust to protect their children's inheritance.
On November 22, 1963, when President John F. Kennedy died the separate trust that his parent’s created for him continued to be held in trust for his two children, Caroline and John, Jr. There were no estate taxes or probate costs and his wife Jackie was not a beneficiary. The Trustee was only able to distribute funds to Jackie, as the natural guardian, for health, education, maintenance and support of Caroline and John, Jr. Jackie remarried, but it did not affect the trust. In1994 when Jackie died she was very much involved with a man who had modest wealth, but he did not get any of the assets in the trust when she died.
In 1999 when John F. Kennedy, Jr. died his estate was sued by his Father-in-Law and Mother-in-Law for the wrongful death of their two daughters. Nevertheless the trust that Joe and Rose Kennedy created passed estate tax free and creditor claims free to Caroline where it is safe and sound today.
In 1970 when Senator Ted Kennedy was sued by the estate of Mary Jo Kopeckney for her wrongful death in the summer of 1969, the trust his parent’s created for him was protected from that lawsuit. Fortunately for the Kopeckney estate Senator Ted Kenedy had about $350,000 in liability insurance and they settled out of court. Some years later when Senator Ted Kennedy and his wife Joan got divorced, none of the assets in his trust were affected by the divorce.
Through proper estate planning, your living trust can accomplish the same.