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Wednesday, August 3, 2016
Protecting Your Estate Planning Goals In the Event of Your Spouse's Remarriage After Your Death
Summary: A QTIP trust can be a vital element of some estate plans. Whether you are worried about your spouse's children from another marriage, your spouse's potential for remarrying after you die or your spouse's inability to manage the wealth you stand to leave behind, a QTIP trust may be able to help. Your estate planning attorney can show you how this type of planning can allow you to provide for the care and well-being of your spouse during his/her remaining years while also ensuring that, after your spouse dies, all of your remaining wealth goes to the people you want to receive it.
In 1980, not long before his untimely death, famed singer John Lennon wrote a song entitled "Grow Old With Me." The song, with its message of a couple sharing two long lives together, is a popular one at weddings. Unfortunately, in many instances, one spouse will outlive his/her partner by many years, even many decades. Proper estate planning can help you ensure that, should your spouse outlive you, you can have peace of mind knowing that both he/she and your children are taken of, even if your spouse re-marries.
Some people have, among their estate planning goals, the desire to ensure that their spouses and children and grandchildren are well taken of and will enjoy the fruits of their wealth, but also, as another goal, want to be sure that only their loved ones benefit from the estate. Without a proper estate plan, these twin goals could be at risk. If you and your spouse have "sweetheart wills," which are mirror-image wills in which each one of you leaves everything to the other, serious problems could arise if you die first, especially if your spouse remarries after you die. If your spouse and his/her new spouse created their own set of "sweetheart wills," and your spouse dies before the person he/she married after you, all of your wealth that still remained after your spouse's death would go to this subsequent spouse. If your spouse were to remarry and later die with no will at all, the intestate laws would also create a scenario where your spouse's subsequent spouse would receive a portion of your wealth.
Simply creating a joint revocable living trust may not always protect you, either. Depending on how the trust is structured, the spouse who survives longer may have total control to amend the trust any way he/she sees fit, which could include altering distributions to benefit a subsequent spouse or relatives of that spouse.
A careful and detailed estate plan can offer protection, though. The law allows you to create a Qualified Terminal Interest Property trust (or QTIP trust, for short.) A QTIP trust is structured in a way such that, if you die first, your spouse does not receive the contents of the trust outright. Instead, your spouse's care and well-being in locked in by virtue of his/her receipt of regular income from the trust for the rest of his/her lifetime. Then, once he/she dies, the contents of the trust will go to whomever you want to receive to receive them, such as your children and grandchildren.
QTIP trusts can also be beneficial in another situation, which is if your spouse is particularly inexperienced, unsophisticated or bad when it comes to handling or managing wealth.
In other words, QTIP trusts are just one more example of the wide array of tools at the disposal of your estate planning attorney to help you make sure all of your goals and objectives are realized.
This article is published by the Legacy Assurance Plan and is intended for general informational purposes only. Some information may not apply to your situation. It does not, nor is it intended, to constitute legal advice. You should consult with an attorney regarding any specific questions about probate, living probate or other estate planning matters. Legacy Assurance Plan is an estate planning services-company and is not a lawyer or law firm and is not engaged in the practice of law. For more information about this and other estate planning matters visit our website at www.legacyassuranceplan.com.
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