As we mentioned in our previous blog post, The most common is a credit shelter trust, which is also known as an AB trust. It works for couples who may have separate assets that are going to different beneficiaries. The surviving spouse still has control over the trust until he or she dies. A marital trust is a way for couples to protect themselves from paying taxes on their assets should one of them die. It’s also known as an “A” trust. Today, our attorney in Raleigh NC is going to talk about another type of marital trust.
Marital Trusts | Attorney in Raleigh NC
Another type of marital trust is a qualified terminable interest property (QTIP) trust, which will transfer all assets to the surviving spouse, but he or she will benefit from the estate for life. These are usually chosen in the case of a second marriage so that the children from the first marriage and the current spouse will both benefit from the estate. What a person outlined in the trust will be followed once the second spouse dies. This can help ensure that changes are not made by the remaining spouse that may not be the wishes of the deceased.
A general power of appointment trust transfers the estate to the surviving spouse, but he or she is able to make decisions regarding it, such as selling property. He or she can also decide who the beneficiaries will be when he or she dies. The surviving spouse ultimately has complete control over the estate and how distributions will be made. Because of this it’s often called an unlimited marital trust. There is a second version of the marital trust, which puts limits on what the surviving spouse can do.
Under the power of appointment, a distribution outright clause can be added that states the surviving spouse will have full control of the property. But in some cases, the transferred estate could be subject to probate and could end up being taxable, which is what a marital trust aims to avoid.
Marital trusts can be an important tool in estate planning because without them there is no way to control what happens to your assets once you die. It can help ensure that your surviving spouse, children and other people you designate as beneficiaries receive what you have outlined.
Our attorney in Raleigh NC is here to help you understand this information if you need more information. You can also visit back with future blog posts, as we will also have more information about the various types of marital trusts.
Are you thinking of estate planning now, so that when the time comes, your affairs are in order and have representatives that will take care of them for you, should you pass in an untimely death or become incapacitated? If so, it might be time to contact our attorney in Raleigh NC.
Contacting an attorney to help with estate planning will help you ensure that you include everything that’s needed for estate plans. Wills, trusts, power of attorney, and other things are important to include if they’re needed. Don't hesitate to call to make an appointment, now.