The Living Trust Advisor

CHAPTER 10 Will You Divert Your Deceased Spouse’s Half of the Living Trust Assets from Your Offspring? Or, How to Make Your Children Fret and Hope That You Will Do the Right Thing

During the joint lifetimes of you and your spouse, you both owned your Living Trust assets together. You owned half. Your spouse owned half. When your spouse died, you became the owner of both halves as one whole.

But, for purposes of explaining the main issue of this chapter, I need to characterize the Living Trust assets as “your half” and “your deceased spouse’s half.”

Before I get into the main issue of this chapter—possibly diverting your assets from your offspring—let’s begin by discussing the goals of the Living Trust after the death of your spouse.

Financial Advisor Alert

The concerns discussed in this chapter arise in second marriages when there are children of the first marriage. If one or both of your husband-and-wife clients are on their second time around, you must raise the idea of inserting a plan in their Living Trust that prevents the surviving spouse from completely diverting the Living Trust assets from the family bloodline.

The Three Goals of Living Trust Management after the Death of Your Spouse

After the death of one’s spouse, there are three goals that must be achieved in order to have a successful Living Trust.

Goal 1: The first goal is to protect your ownership and control of your Living Trust assets for the remainder of your life. In other words, if you become incapacitated ...