How to Handle Inheritance When a Loved One Is Incarcerated
It’s not a situation most people plan for. But what happens if someone you’ve named in your will or trust is in jail or prison when you pass away?
Can They Still Inherit?
Yes. Incarceration doesn’t automatically disqualify someone from receiving an inheritance. But collecting it—and managing it—gets complicated.
If the beneficiary receives money outright, it may be deposited into their inmate account. However, most prison systems place strict limits on what an inmate can hold and spend. And if the person owes restitution, court fines, or child support, the inheritance could be intercepted.
What Are the Risks?
Giving a large lump sum to someone in jail may make them a target. It can also be quickly depleted by fees, debts, or manipulation by others inside the system. And if the inheritance includes real estate or complex assets, managing those from behind bars can be nearly impossible.
A Better Approach: Use a Trust
With a properly drafted trust, you can name someone to manage the inheritance on the beneficiary’s behalf. The trustee can delay distributions, pay for necessities directly, and protect the assets until the person is released—or longer, if needed.
