She won’t inherit a cent of her husband’s trust — and The Ramsey Show says asking their daughter for a cut ‘feels gross’

But hosts Rachel Cruze and Ken Coleman tell Eileen that asking their daughter for a cut of her inheritance feels “gross.” Here’s what the couple could do instead — and what they should have done earlier. For Canadians in blended families or second marriages, this story is worth paying attention to.

What exactly is a bloodline trust?

In Canada, you’ll likely have never heard the term “bloodline trust.” Instead, it’s a discretionary family trust structured to keep wealth within a direct bloodline — it’s an estate planning tool that’s entirely legal (2).

In a discretionary family trust, a trustee manages assets on behalf of beneficiaries the deceased person (settlor) names, typically their children and grandchildren. The trust can be structured so that assets are protected for direct descendants and are generally shielded from claims by in-laws, stepchildren, or a child's future ex-spouse. Because beneficiaries of a discretionary trust have no guaranteed right to distributions, those assets typically do not form part of divisible property in a divorce. That said, this protection is not absolute — Canadian courts have, in some circumstances, examined whether trust assets were used to fund a family's lifestyle, and a determined ex-spouse may still have legal grounds to challenge distributions. The strength of the protection depends heavily on how the trust is drafted and administered (3).

In Eileen’s case, her husband’s family set up this type of trust before he married her. As a beneficiary — not the settlor — he has no power to change the terms or add her as a beneficiary. Once the settlor dies and the trust becomes irrevocable, the terms are locked (3).

A trust like this bypasses probate — the court process of validating a will — meaning assets transfer directly to named beneficiaries and creditors generally can’t go after them (4).

The tradeoff? It also disinherits a beneficiary’s spouse and other loved ones because they don’t share the same bloodline. And there’s nothing a beneficiary spouse can do about it.

It can also backfire in unintended ways. For example, consider a couple with two children — one biological and one legally adopted. Under Canadian law, an adopted child has exactly the same legal status as a biological child for all purposes, including inheritance. This means that if a trust deed simply refers to 'children,' 'issue,' or 'descendants' without further definition, a legally adopted child would generally be included on equal footing with a biological kin. However, if the trust deed was drafted to explicitly define 'bloodline' or 'descendants' as meaning biological descendants only, then the adopted child could be excluded — receiving nothing while the biological child inherits the full trust (5).

Whether this outcome occurs depends entirely on the specific language used in the trust document. Families with both biological and adopted children should review any existing trust deeds carefully with an estate lawyer to understand how their children are defined

Does Canadian law protect a surviving spouse?

Canadian law diverges somewhat from U.S. law here — but the end result for Eileen is the same.

In most Canadian common-law provinces, surviving spouses do have legal rights to a portion of a deceased spouse’s estate. In Ontario, for instance, a surviving spouse may choose between their entitlement under the will of the deceased, or an equalization of net family property, which represents equal sharing of all marital assets under the Family Law Act (FLA) (6).

In Canada, there is no single federal law governing wills and estates (7). In Ontario, under the provincial Succession Law Reform Act (SLRA), if the deceased person had children, the surviving spouse is entitled to a preferential share of up to $350,000 of the estate, plus a percentage of the remainder (8). Provincial legislation differs between all provinces and territories, but all have similar protections regarding wills.

But here’s the catch: Assets held in a living (inter vivos) trust — meaning it’s set up while you’re still alive — generally don’t form part of the estate when you die. That means they’re not governed by your will, and your spouse typically can’t make a legal claim against them the way they could with estate assets.

For Québec residents, the rules differ again: the Civil Code governs inheritance, and a surviving spouse may hold a usufructuary right over the family residence, but descendants generally take priority when it comes to the estate. Common-law partners in Québec have had no automatic intestate rights — though legislative changes that took effect on June 30, 2025 may extend limited rights to common-law partners in a parental union (9).

The broader lesson: If your spouse’s family holds assets in a trust and you aren’t named as a beneficiary, your provincial spousal rights may not protect you.

Blended families in Canada — a growing financial planning issue

Blended family scenarios also offer an added nuance. According to the 2021 Census, there were more than 500,000 stepfamilies in Canada, representing 8.4% of all couple families with children (10). As divorce and remarriage reshape Canadian households, the question of who inherits what — and who gets left behind — is becoming more complex.

The divorce rate has reached a 50-year low in Canada, dropping to 5.6 for every 1,000 married people in 2020 (11). But many Canadians re-partner after divorce: Canadian-born individuals show a 31% rate of entering new relationships after divorce for those aged 35 to 64, according to Statistics Canada (12).

There are often children from first marriages — and where there are trusts in place from these relationships, surprises can arise when second marriages enter the picture.

What The Ramsey Show recommends

“I personally would feel gross about doing that,” said Ramsey cohost Ken Coleman, referring to Eileen asking their daughter to voluntarily split her inheritance.

So what should Eileen and her husband do instead?

Ideally, they would have purchased life insurance years ago to protect the surviving spouse. In Canada — as in the U.S. — life insurance provides a guaranteed, tax-free death benefit that’s paid directly to the named beneficiary. It bypasses probate entirely when a named beneficiary (not the estate) is designated (13). Premiums are typically more expensive if you purchase coverage later in life.

But Eileen and her husband had been counting on the trust money instead. Currently, they have approximately US$350,000 (C$483,000) in savings, including registered retirement accounts, with about US$99,000 (C$136,620) left on their mortgage. Both plan to keep working into their late 60s.

“Whatever you guys can do over the next seven to 10 years to invest a lot of money, that’s going to help you be far more comfortable in your 70s and 80s,” said Coleman.