There are many useful tools to be considered by anyone involved in planning his estate. Each is useful for certain purposes, but deciding what is right for your specific needs can be very complicated. Among these tools is the marital trust. As the name suggests, this type of trust provides for a surviving spouse upon one’s death. A Bryan trust attorney can help you decide whether a marital trust is appropriate in your case.
What Is a Marital Trust?
A marital trust is a trust that is designed both to bypass estate taxes and make sure that assets pass to your surviving spouse. There are limitations to such a trust, and it is important to word it properly so that your wishes are established. With a marital trust, the spouse must be the sole beneficiary. However, your children can be named as beneficiaries upon the death of your spouse. If you write the marital trust to include a general power of appointment, however, your spouse will be free to direct how assets held within are passed upon his or her death.
One value of the marital trust is that if the surviving spouse remarries, the new spouse cannot lay claim to the assets held in trust. These assets can be directed to be paid to your spouse in accordance with a certain plan, or distribution can be left up to the survivor.
A marital trust does not make provision for children immediately upon your death. For this reason you may wish to create a separate family trust in addition to marital trust. The assets in the family trust usually consist of those that are not included in the marital trust. As the grantor, you have the power to determine how and when the assets held in trust are distributed to your children.
Neither the marital or family trust is likely to affect tax implications for your estate. Texas has no estate tax, and the federal minimum for taxable estates is currently over $5 million. Therefore, unless you have a considerable estate you will not need to worry about taxes. On the other hand, if your estate is substantial enough to be taxed, a marital trust removes some of the assets and can lower the remainder to such an extent as to avoid estate tax.