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?