When two corporations merge, the terms of the merger are based on multiple factors. Some of the factors include each corporation’s assets, liabilities, corporate structure, employee demographics, and the unique needs specific to that corporation. Trust planning for a second marriage can be likened to a corporate merger. Many times, the husband and wife of a second marriage bring existing assets and liabilities to the table at the start of the marriage. Families are commonly blended, with spouses sometimes having children from previous marriages, while sometimes having children together. Each spouse enters into the marriage with two distinct and unique family situations that are being merged into a single family unit. For this reason, second marriage trust planning can present unique challenges in ensuring both spouses’ individual estate planning needs are met, while meeting their joint estate planning goals.

There are many estate planning tools that can be used in trust planning for second marriages. One of these tools is a QTIP (Qualified Terminable Interest Trust), commonly called a Marital Trust. This type of trust allows a trustmaker to provide for their surviving spouse, while still having control over how their estate is distributed after the surviving spouse’s death. This tool can help ensure that children from a first marriage receive their share of the trustmaker’s estate. Another option is a Charitable Lead Trust. In this type of trust, a trustmaker funds the trust with assets that will go to straight to their descendants upon their death. The difference between this and a normal trust is that a set percentage of the trust’s assets will go to charity. This allows you to pay a much smaller gift tax when initially funding the trust, while saving your beneficiaries from paying much larger estate taxes when they receive their shares. A final example are prenuptial and postnuptial agreements. These agreements can be drafted to detail how each spouse’s assets will be divided among their descendants, along with the ability to waive a spouse’s inheritance rights to an individual’s specific assets.

It is important to seek out a qualified legal expert with experience creating custom trust plans for individuals in a second marriage. There are multiple options that can be used to create a trust plan that meets your needs. It’s important to find an attorney that can guide you through those options in order to ensure that your legacy is distributed to your descendants as you desired.

For additional reading:

An Asset Protection Trust

A Family Limited Partnership

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