What Exactly Is A Marital Trust In Florida? How Does it Work?
A marital trust is a type of trust used most commonly when there is a second or subsequent marriage involved, especially in situations with blended families and step-children. The main purpose for establishing a marital trust is the idea of what are you going to leave to your blood children versus what are you going to leave their step-parent and whether that is enough to support the step-parent for the remainder of their life. What should happen to the step-parent’s interest in the trust when the step-parent dies? A marital trust is a legal tool used to manage the relationship between your surviving spouse and your blood children, who may not be the children of the surviving spouse.
The main living trust document would address what happens upon the death of the first spouse and the division of assets from there. The first issue would be which assets are going to be put into the living trust, which could later become the marital trust or the bypass trust upon death. There would be a living trust agreement and then, upon the death of the first spouse, the living trust agreement would say which assets go into the marital trust, which will be subject to the rules you create, and which assets will go off into what is usually known as a credit shelter trust or a bypass trust, also known as the family trust.
Once inside the marital trust, you will decide which rights your surviving spouse will have. A marital trust can also be created under the terms of your last will and testament and function the exact same way. When a marital trust is created under your will, it is called a testamentary marital trust; when it is created under your living trust, it is a part of your living trust. The marital trust also requires careful consideration with respect to how your assets are titled during your lifetime and whether they are in your name only or in the new trust’s name. Another item to be considered is whether assets will essentially be pooled together, as a joint trust with you and your spouse, or whether you and your spouse will maintain separate assets.
Why Should Someone Establish a Marital Trust?
A marital trust should be established in the case of second or subsequent marriage, especially if you have children. The trust will address the most common concern in an estate: the surviving spouse and the rights of your children. Your surviving spouse cares deeply about what he or she is going to live on, especially if you owned the majority of the family assets prior to marriage. The spouse with fewer assets and less income is going to be deeply concerned about what he or she going to use to survive, if you pass away as the primary earner. Your children and you are going to be concerned about your spouse leaving out your blood children from his or her will or trust when he or she dies.
You don’t want your surviving spouse essentially disinheriting your children. This can and does happen. If your assets are named jointly and you pass away, all the assets go to your surviving spouse. Your surviving spouse may have said when creating the estate plan that you were going to split everything equally amongst your children. However, once you are gone, your surviving spouse is the sole owner of all your assets and outside of a marital trust, he/she can decide to leave your children out of the estate distribution and leave only to his/her children. There is no legal restriction preventing your surviving spouse from disinheriting your children or requiring them to adhere to verbal commitments made during your lifetime. A marital trust is used to better define how you want to allocate your estate between your surviving spouse and your children.
For more information on Marital Trust In The State Of Florida, an initial consultation is your next best step. Get the information and legal answers you’re seeking by calling (904) 398-6100 today.
Call Us Today
(904) 398-6100
