In many states and in many retirement plans, you have to get the agreement of the spouse to make a change to any kind of beneficiary designations. Failure to do so may invalidate the beneficiary designation. In most situations, you are going to want to read any beneficiary designation forms regarding whether or not the spouse will have to sign any kind of changes.
What Types of Trusts Might Be Beneficial For A Blended Family?
When you have a blended family, the most common trust used to allocate rights between your surviving spouse and children is a marital trust. A type of marital trust is a QTIP trust, which will say things such as the surviving spouse only has rights to income placed into this trust and not principle rights. Or, the marital trust can say that the surviving spouse has unlimited rights and be a purely discretionary marital trust. With a marital trust, there is also what is called a family or children’s trust. Using these two types of trusts after the death of a first spouse will allocate the rights to income and principal of your assets, after your death, between your surviving spouse and your children.
On the creation of these trusts, everyone needs to consider who will serve as trustee because the trustee of these trusts will determine how the money will be released and when the money will be released. If you name your surviving spouse as trustee over all of these trusts, there is little accountability if the surviving spouse does not follow the rules. A very comprehensive discussion between you, your family members, and professionals needs to be had to determine who will serve as trustee and determine the rights of the children versus those of the surviving spouse.
What Are Some Common Mistakes That Blended Families Make When It Comes To Revising Or Setting Up New Estate Plans?
The most common mistake is the trust that is paid to you by your spouse. A lot of husbands and wives who are walking into a second marriage do not want to experience the pain and distrust that they may have experienced in their first marriage They walk into their second marriage wanting to give their spouse the benefit of the doubt that upon the first to die, the survivor will implement the couple’s wishes correctly between the surviving spouse and the adult children of the first spouse to pass away.
Everyone wants to trust their spouse but when it comes to your spouse versus your adult children, it’s an extremely hard decision to make, in order to be fair to all the parties. If you do not set up your estate plan a certain way, your surviving spouse can decide to completely disinherit your children. Meanwhile, the money that he or she receives from you can be used on your surviving spouse’s children instead. Without setting this up correctly, you could be disinheriting your children fully because your surviving spouse, after you die, can always change his or her estate plan and decide not to share with any of your kids.
When your directions are vague and generalized, it’s up to your family to fill in the gaps. The family may take certain statements you’ve made in your lifetime to mean one thing or another. Getting it into a trust and a marital agreement will make your intent legally binding. Get it all in writing and don’t assume anything because the second marriage situation is the most common avenue to estate fights that I’ve seen in my practice.
For more information on Modification Of Retirement Accounts, an initial consultation is your next best step. Get the information and legal answers you’re seeking by calling (904) 398-6100 today.
Author Bio
Kellen Bryant, Esq.
Founder
Florida Bar Board Certified Elder Law Attorney, Kellen Bryant focuses his law practice on advising and helping caregivers with a particular focus on asset protection and preservation from long-term care costs, creditors, and predators. Kellen Bryant is AV Preeminent® Rated, meaning his attorney peers rated him at the highest level of professional excellence. Kellen Bryant was nominated and selected as a Super Lawyer, Rising Star: 2022.
