Protecting Your Children’s Inheritance From Divorce and Lawsuits

Reviewed by Turner Henington, attorney, Texas Bar No. 24148206 · Updated October 2026

Most parents we meet aren’t worried about their children. They’re worried about what could happen to their children: a divorce, a business that fails, a car accident lawsuit, an addiction, or a spouse who ends up with the family money. Henington Lewis Law Firm PLLC writes inheritance-protection trusts for families in Austin and Travis, Williamson and Hays Counties so that what you leave stays with your children, and after them, with your grandchildren.

What Is Inheritance Protection?

Inheritance protection means leaving a child’s share in a trust that is built to protect it, instead of handing it to them outright. Your child can be a trustee of their own trust and use the money for their health, education and support, but because the trust, not your child, owns the assets, they are much harder for a divorcing spouse or a creditor to reach. You decide how much control and protection each child gets.

How Texas Treats an Inheritance in Your Child’s Marriage

Texas is a community property state. An inheritance starts out protected, but it is easy to lose that protection:

Divorce isn’t the only risk. An inheritance your child owns outright can be taken to pay a judgment from a car accident, a business debt or a bankruptcy. Inside a spendthrift trust, it generally can’t be, and federal bankruptcy law generally respects that protection.

What Is a Heritage Trust?

A Heritage Trust is our name for a lifetime trust for each child, built into your living trust. When you die, instead of your child receiving a check, their share moves into their own Heritage Trust. A typical design:

• Your child can be a trustee and manage the investments, buy a house in the trust’s name, or fund a business.
• Distributions for health, education, maintenance and support are available to your child, so the money is used, not locked away.
• An independent co-trustee can be added to make larger or discretionary distributions, which strengthens the protection.
• A spendthrift clause stops your child from pledging the trust and stops most creditors from reaching it.
• Your child chooses who inherits it next among your descendants, so it stays in the bloodline instead of passing to a son- or daughter-in-law.
• It can last for generations. Texas allows trusts created after September 1, 2021 to last up to 300 years (Property Code § 112.036), and allocating your generation-skipping tax exemption can keep it out of your child’s taxable estate.

Outright, at Set Ages, or in a Heritage Trust?

The Limits You Should Know About

• Child support. A Texas court can order a trustee to pay a beneficiary’s child support from amounts the trustee is required to distribute, and from trust income if distributions are discretionary (Family Code § 154.005).
• Money that has been paid out belongs to your child and loses the trust’s protection. That’s why the trust can pay bills directly or buy assets in its own name.
• You can’t protect your own assets this way. A spendthrift clause doesn’t protect a trust from the creditors of the person who created it and benefits from it (§ 112.035(d)). Heritage Trusts work because you create them for someone else.
• Your child’s own estate planning still matters. A prenuptial agreement and good recordkeeping work alongside the trust.

Who Should Consider a Heritage Trust

• Parents whose children are married, or will be, especially if you’re unsure about a son- or daughter-in-law.
• Children who are doctors, business owners, real estate investors or in other jobs with lawsuit risk.
• A child who struggles with money, addiction or a controlling partner.
• Families who want the inheritance to reach grandchildren. See our page on bloodline planning for grandparents.
• Larger estates that want to keep assets out of the next generation’s taxable estate.

Who Will Prepare Your Plan

Turner Henington and Samantha Lewis founded Henington Lewis Law Firm, and one of them works on every plan we write. Turner is a former KPMG tax accountant and a graduate of The University of Texas School of Law. Samantha has nearly a decade of experience in Texas and federal courts and handles estate disputes, so she drafts with an eye to how plans get challenged. Our office is at 1101 S. Capital of Texas Hwy, Bldg G, Suite 150-C, near West Lake Hills, and we also meet by phone and Zoom.

What Our Clients Say

Inheritance Protection FAQ

Is an inheritance community property in Texas?

No. Property a person receives by inheritance or gift is their separate property under Texas Family Code § 3.001. But the income it earns during the marriage is generally community property, and if inherited money is mixed into joint accounts, it can be presumed community and become hard to protect.

Can my son-in-law or daughter-in-law get my child’s inheritance in a divorce?

They can if the inheritance has been mixed with marital property or its income treated as community. If the inheritance stays in a properly drafted trust, the trust property isn’t part of the marital estate, so it is much better protected.

What is a spendthrift trust in Texas?

A spendthrift trust has a clause, allowed by Texas Property Code § 112.035, that stops the beneficiary from selling or pledging their interest and stops most creditors from taking it before it is paid out. It is the core of an inheritance-protection trust.

What is a Heritage Trust?

A Heritage Trust is our name for a lifetime, protective trust for each child, built into your living trust. Your child can be a trustee and use the money for health, education and support, while the trust protects it from divorce, lawsuits and creditors and keeps it in your family.

Will my child lose control of their inheritance?

No. Your child can be a trustee of their own trust, manage the investments and receive money for their needs. You decide how much control they have and whether an independent co-trustee is involved.

Can a trust protect my child’s inheritance from lawsuits?

Generally, yes. A creditor of your child generally can’t reach property held in a spendthrift trust you created, though there are exceptions such as child support, and anything already paid out to your child is no longer protected.

Does a Heritage Trust help with estate taxes?

It can. If you allocate your generation-skipping transfer tax exemption to the trust, what’s left in it when your child dies can pass to your grandchildren without being taxed in your child’s estate. The 2026 GST exemption is $15 million per person.

How long can a trust last in Texas?

For trusts that become irrevocable on or after September 1, 2021, Texas allows interests to vest up to 300 years later, so a trust can last for many generations.

What does an estate plan with Heritage Trusts cost?

Every plan is a flat fee, quoted in writing after a free consultation. Heritage Trusts are built into your living trust, not sold as a separate product.

Sources and Texas Law Cited

The legal and tax statements on this page are based on the primary sources below. Laws and figures change, and this page was last reviewed in October 2026. This page is general information, not legal advice for your situation.

• Texas Family Code § 3.001 – Separate property
• Texas Family Code § 3.002 – Community property
• Texas Family Code § 3.003 – Presumption of community property
• Texas Family Code § 4.103 – Agreement concerning income from separate property
• Texas Property Code § 112.035 – Spendthrift trusts
• Texas Property Code § 112.036 – Rule against perpetuities for trusts
• Texas Family Code § 154.005 – Payment of child support by trust
• 11 U.S.C. § 541 – Property of the bankruptcy estate (spendthrift trusts, § 541(c)(2))
• 26 U.S.C. § 2631 – GST tax exemption
• IRS Rev. Proc. 2025-32 – 2026 estate, gift and GST exemption ($15 million) and annual exclusion ($19,000)

Keep Reading

• Estate Planning for Grandparents
• Estate Planning for Blended Families
• Estate Planning for Business Owners
• Protecting an Inheritance From Divorce and Creditors in Texas
• Trust Beneficiary Rights in Texas
• Protecting Generational Wealth
• Why Choose a Revocable Living Trust
• Austin Estate Planning Attorney
• Estate Planning for Every Stage of Life