Should a married couple create one trust or two? To some extent, it comes down to a matter of preference. Some couples see their stuff as belonging to both of them, while others differentiate between one spouse’s stuff and the other’s. Differentiation might be important if one spouse has children from a prior marriage, and the preference is to have the stuff that one spouse brought into the marriage going to that spouse’s descendants. Another practical reason for using separate trusts is that the trust of the first spouse to die can be designed to provide heightened creditor protection for the surviving spouse.
If both spouses want the survivor spouse to have unlimited control over their combined assets after one of them dies, one trust will work. However, unlimited control means that the survivor can leave their combined assets to his or her next spouse, or the next spouse’s children (to the exclusion of the original couple’s children). This is not rare. But special rules can be built into their rule books to make sure that their stuff can be used for the two of them for as long as both live, and then for the survivor for his or her lifetime, and then each spouse’s stuff goes where he or she wants, irrespective of the wishes of the survivor.
Your trusted advisors can help you choose what will work best for you and your ‘ohana.
EST8PLANNING COUNSEL LLLC
Scott Makuakane, Counselor at Law
808-587-8227 | maku@est8planning.com
Est8planning.com
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