If you are getting remarried as a parent with children from a previous marriage, you may have two considerations.
If you leave your spouse all or most of your resources, there would be no guarantees with regard to the inheritances that you want to leave to your children. Your surviving spouse could decide that they do not want to leave anything to your children for one reason or another.
Fortunately, there is a remarriage estate planning solution if you are in this situation, and we will look at it in this post.
Qualified Terminable Interest Property (QTIP) Trust
There is an estate planning tool to address just about any scenario, and the right tool for this job is the qualified terminable interest property trust. When you establish and fund this type of trust, you name a trustee to act as the administrator.
You can name another family member or personal friend, but this is a sensitive position because there are competing interests. And if you have income-producing assets, you want someone that is an experienced financial manager to maximize the resources.
Trust companies and the trust departments of banks provide trustee services for a fee. A professional fiduciary can be the right choice for many people because there would be competent administration, no conflicts of interest, and organizational oversight.
Your spouse would be the first beneficiary of the QTIP trust, and your children would be the final beneficiaries.
If you die first, the trustee would distribute the earnings that are generated by the resources to your spouse for the rest of their life. You could also give the trustee the latitude to distribute portions of the principal under certain circumstances if you choose to do so.
The surviving spouse can also use property that is technically owned by the trust, so they could live in a home that you owned, but they would not have the ability to sell it.
You would be fulfilling your responsibility to your spouse if you plan your estate in this manner, but they would have no ability to change the terms of the trust in any way. After their passing, your children would inherit the assets that remain in the trust.
Circumvent an Awkward Dynamic
This approach is very effective, but there is an element that involves human nature. Your children may know that they are going to receive their inheritances eventually, but there is no getting around the fact that they have to wait until your spouse dies.
The implications are obvious, but you can address the matter in advance. When you plan your estate, you can set aside a certain amount that will be transferred your children immediately after you die. This should prevent turbulence that could exist among the surviving members of your family.
Attend a Complimentary Estate Planning Seminar!
You are here on this website because you’re looking for information about estate planning, and you are making the ideal connection. We have a treasure trove of resources here that you can access free of charge, so you should look around to build on your knowledge.
Plus, we update this blog on an ongoing basis, and there is always some new information to absorb. In addition to these written resources, we get out into the community offering seminars to our neighbors. This is another complimentary opportunity, and this is a time investment that will yield dividends.
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Are You Are Ready to Act?
If you have already decided he would like to work with a Glastonbury or Westport, CT estate planning lawyer to develop your plan, there is no time like the present. You can call us at 680-548-1000 to schedule a consultation, and you can use our contact form to send us a message.
Mr. Karpe is licensed to practice law before the courts of the States of Connecticut and Colorado, the U.S. District Court for Connecticut, the U.S.District Court for Colorado, the United States Supreme Court, and the U.S. Tax Court. He is a member of the Connecticut and Hartford County Bar Associations as well as the Estate and Probate Section of the Connecticut Bar Association. In addition, he is a member of the American Academy of Estate Planning Attorneys, the National Academy of Elder Law Attorneys and Planned Lifetime Assistance Network of Connecticut.