The Living Trust Advisor

CHAPTER 12 Dealing with Your Living Trust If You Remarry Or, The Battle Royal: Your Second Spouse Versus Your First Children

 

Take a quick moment to reread the subtitle of this chapter. Do you feel that my word choice is a bit peculiar? For anyone who has remarried after the death of a spouse, who has become the new wife of a recent widower, or who has inherited a new stepparent, you will agree with my choice of words. Trust me; if you choose to remarry and you later die before your second spouse, your Living Trust will result in a clash of the beneficiaries—a battle of your first children versus your second spouse.

Financial Advisor Alert

This chapter mainly addresses the “waiting game” that arises in this inheritance scenario. If your client remarries after the death of her first spouse, your client will likely amend the Living Trust so that the second spouse is taken care of for the rest of his life. The second spouse is named as the successor trustee who shall have the power to wheel-and-deal with the Living Trust assets. The second spouse will get all income. The second spouse will get the right to reside in the residence. The second spouse may even get to dip into the principal for health, support, and education. When the second spouse dies, the first children receive distribution of the remaining Living Trust assets.

Of course, this creates a situation where the first children have to wait for the second spouse to die so they can inherit. The effects of this waiting ...