The question of restricting trust distributions upon a spouse’s remarriage is a common one for estate planning attorneys like Steve Bliss in San Diego, and the answer is generally yes, but it requires careful planning and drafting. Trusts are powerful tools for controlling the distribution of assets, even after your passing, and can be specifically tailored to address concerns about future family dynamics. A well-drafted trust can protect assets intended for your children or other beneficiaries from potentially being accessible to a new spouse. Approximately 60% of Americans have a will or trust, highlighting the growing awareness of estate planning, but not all of these documents adequately address post-death remarriage scenarios. The key lies in defining clear distribution terms within the trust document itself, outlining conditions and limitations related to spousal remarriage.
What happens if my trust doesn’t address remarriage?
If a trust doesn’t specifically address the possibility of a surviving spouse remarrying, distributions are typically governed by the default provisions of the trust, or state law if the trust is silent. This often means the spouse receives income from the trust for life, and any remaining assets pass to the remainder beneficiaries (usually children) upon their death. However, this doesn’t prevent the spouse from spending down the principal, or using trust assets in ways the grantor might not have intended, especially if they later remarry and have new financial obligations. This lack of control is a primary reason clients seek specific language in their trusts to address this scenario. A study by the AARP indicated that over 50% of remarriages occur after the age of 50, meaning this is a very real concern for many estate planners.
Can I completely disinherit my spouse if they remarry?
While you can’t entirely disinherit a spouse during your lifetime due to spousal rights laws, a trust can be structured to significantly limit their access to assets after your death, *especially* if they remarry. It’s crucial to understand the distinction between outright ownership and a continuing trust. A trust can be drafted to provide the surviving spouse with income during their lifetime, but specify that the principal remains untouched and ultimately passes to the children. Another approach is to create a “qualified terminable interest property” (QTIP) trust, allowing the spouse to receive income for life, but requiring the remaining assets to go to the designated beneficiaries upon their death, even if that occurs after remarriage. This is a legally sound method of maintaining control over asset distribution. Remember, state laws vary, and the specific terms must be carefully crafted to be enforceable.
What are some common ways to restrict distributions?
There are several techniques for restricting distributions in the event of remarriage. One method is to include a “remarriage clause” that triggers a change in distribution terms. For example, the trust could state that if the spouse remarries, the income stream is reduced, or a portion of the principal is immediately distributed to the remainder beneficiaries. Another is to create a separate “marital trust” for the spouse with limitations on how the funds can be used, such as prohibiting them from gifting assets to their new spouse. Additionally, you can use a “spendthrift clause” to protect the trust assets from the claims of the new spouse’s creditors. These clauses ensure the trust assets remain protected, even if the spouse faces financial difficulties in their new marriage. It’s essential to work with an experienced estate planning attorney like Steve Bliss to determine the most appropriate approach for your specific circumstances.
What if my spouse was promised certain assets before the trust was created?
Promises made to a spouse regarding assets prior to the creation of a trust can be addressed within the trust document itself. For example, if you had agreed to leave your spouse a specific sum of money or property, you can explicitly state that this promise is fulfilled through the trust, even if the trust otherwise restricts distributions. This helps avoid potential disputes and ensures your intentions are clear. It’s crucial to document these prior agreements in writing and include them as exhibits to the trust document. A well-documented understanding minimizes the risk of legal challenges later on. Approximately 25% of estate disputes involve disagreements over promises made before death.
Let’s talk about a situation where things went wrong…
I once worked with a client, Mr. Henderson, who created a trust without specifically addressing the possibility of his wife remarrying. He intended for his children from a previous marriage to inherit the bulk of his estate, but his wife was entitled to income from the trust during her lifetime. Several years after Mr. Henderson’s death, his wife remarried a man with significant debts. The new husband quickly began pressuring her to use trust assets to pay off his obligations. She, wanting to support her new husband, started making distributions to him, depleting the funds intended for Mr. Henderson’s children. The children, understandably upset, had to engage in costly litigation to protect their inheritance. The court ultimately ruled in their favor, but the entire situation could have been avoided with a simple remarriage clause in the original trust. It was a painful lesson in the importance of anticipating potential future events.
How can careful planning prevent issues like that?
Fortunately, I also had another client, Mrs. Davies, who came to me seeking a comprehensive estate plan, explicitly worried about her spouse remarrying. We crafted a trust with a specific remarriage clause. The trust stated that if her spouse remarried, the income stream from the trust would be reduced by 50%, and the remaining principal would be held in trust for her children. The clause also included a spendthrift provision protecting the assets from the claims of any new spouse. Years later, her spouse did remarry. The trust terms were automatically triggered, reducing the income stream but ensuring the bulk of the assets remained protected for her children. The entire process was seamless and avoided any family conflict. Mrs. Davies’ foresight and proactive planning provided peace of mind and ensured her wishes were carried out exactly as intended. It was a shining example of how a well-drafted trust can protect your family’s future.
What ongoing review is needed after creating a trust?
Even after a trust is created, it’s important to review it periodically, especially when there are significant life changes, such as a marriage, divorce, birth of a child, or a substantial change in financial circumstances. State laws also evolve, so it’s important to ensure your trust remains compliant and effective. A review every three to five years is generally recommended. Approximately 40% of Americans don’t update their estate plans after significant life events, leaving their plans outdated and potentially ineffective. Regular reviews and updates can prevent unintended consequences and ensure your wishes are carried out as intended.
About Steven F. Bliss Esq. at San Diego Probate Law:
Secure Your Family’s Future with San Diego’s Trusted Trust Attorney. Minimize estate taxes with stress-free Probate. We craft wills, trusts, & customized plans to ensure your wishes are met and loved ones protected.
My skills are as follows:
● Probate Law: Efficiently navigate the court process.
● Probate Law: Minimize taxes & distribute assets smoothly.
● Trust Law: Protect your legacy & loved ones with wills & trusts.
● Bankruptcy Law: Knowledgeable guidance helping clients regain financial stability.
● Compassionate & client-focused. We explain things clearly.
● Free consultation.
Map To Steve Bliss at San Diego Probate Law: https://g.co/kgs/WzT6443
Address:
San Diego Probate Law3914 Murphy Canyon Rd, San Diego, CA 92123
(858) 278-2800
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Feel free to ask Attorney Steve Bliss about: “Can a trust own out-of-state property?” or “What are signs of elder financial abuse related to probate?” and even “Can a non-citizen inherit from my estate?” Or any other related questions that you may have about Probate or my trust law practice.