Oftentimes married couples would like more control over how their trust
property is distributed after their death. This may occur if a couple
enters into a second or third marriage later in life, but has children
from previous marriages. The trust maker may wish to guarantee that her
current spouse may still use some of the trust assets after her death,
while also leaving a significant amount to her children from a previous marriage.
A common example involves the use of the couple’s home. If the wife
owns the home, she may still want her second husband to be able to live
in the home after her death, but after he dies, wants the home to go to
her children from her first marriage.
Achieving Your Goals through a Marital Property Control Trust
This can be accomplished through a marital property control trust. This
kind of trust would name the spouse as the “life beneficiary”
for the trust property, giving the surviving spouse a limited right to
use the property during his lifetime only. The surviving spouse would
not have the right to leave that property to anyone else and may only
use the trust property as specified in the trust document. As a result,
the children of the trust maker would be the final beneficiaries of the
property and receive it upon the surviving spouse’s death.
Some important questions to think through when considering a marital property
control trust include:
- Who should be named as the trustee? The surviving spouse may not be the
best person or the duty might best be shared amongst the surviving spouse
and a child from a previous marriage.
- What rights does the surviving spouse have regarding the trust property?
If it’s a house, can the surviving spouse rent it out? If its investment
assets and the surviving spouse gets interest only, can he also buy and
sell the assets?
- Who will manage the day-to-day maintenance of the trust property?
- What regular reports or accounting must be given on the trust property
to the life beneficiaries?
- What happens if the surviving spouse abandons the property? What would
constitute “abandonment” of such property?
A marital property control trust can be very effective if drafted properly,
but it can also quickly become quite complicated. Thus it is critical
that an estate planning attorney be consulted to create such a trust.
Turn to Randick O’Dea Tooliatos Vermont & Sargent today! Our lead attorney, Hannah Sargent,
offers dedicated representation in and throughout Alameda County. Call
us today to get started!