Trust Variations - Married Couples
A trust usually terminates, and the married couple's children
receive the assets, when the surviving spouse dies. The trust
can be set up, however, to keep going through the children's
lifetime and go to their children upon the death of the original
couple's children. That is,the trust can be set up to benefit
the grandchildren instead of the children.
A trust can also be designed so that a portion of its assets
can be removed as an educational trust for the grandchildren
when the surviving spouse dies, or any of a number of similar
variations. Whatever the wishes of the couple who first institute
the trust are, it's likely a trust can be established to meet
those needs.
Since Trust B will become irrevocable upon
the death of the first spouse, all contingencies should
be carefully considered and addressed before executing
the trust. While it's horrible to imagine, if the trust
is set up to distribute its assets to the couple's three
children and one of the children predeceases the parents,
what then? Does the deceased child's share revert to his
surviving siblings, or should it be left to benefit his
surviving children? These are all critical decisions to
be made by the grantors, and stated in their trust agreement.
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Also, the trust agreement should fully reflect the decisions
made about the trustees. While the husband and wife
are typically co-trustees when the trust is initiated
with the surviving spouse becoming sole trustee when
the first dies, a successor trustee needs to be named
to take over when the surviving spouse dies or becomes
incapacitated. Again, this successor is often one or
more of the couple's children, but another successor
needs to be named if the original successor is unable
or unwilling to execute the job of trustee.
The longer the trust is in existence, the greater the
concern about the trustee. Careful consideration must
be given to naming successor trustees, especially if
the trust will continue throughout the lifetimes of
the original couple's children. If a trust is expected
to last forty to fifty years, the potential that the
named successor may not survive needs to be taken seriously.
If no one is named as successor, or if none of the named
successors survive until the trust expires, the Court
is called upon to name a new trustee. THE MAMOLA LAW FIRM, APC is conveniently located throughout Orange County. For additional information, please contact us at (949) 333-6543.
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