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I understand if you have a trust set up it cannot be changed when one spouse passes. For example, if both husband and wife set up a trust and name oldest child to manage youngest child's money (let's say youngest is not financially stable at this time but might be in 10 years). If one spouse dies then that can never be altered? What happens if 10 years go by and youngest becomes more stable and you don't want their inheritance handled anymore by oldest? Am I missing something? This is an issue my friend is going through and I just truly don't get it. Why would anyone make a will or trust that way? Can someone explain please? Thank you.
You ask good questions, but given time and space limitations I can only give brief answers.
Whether a trust can be amended after the death of one spouse, may depend on whether you do a joint trust or an individual trust. A joint trust is one trust executed by both spouses. An individual trust may be amended after death depending on the provisions of the trust. For instance, certain jurisdictions allow for a trust protector who can change the terms of an irrevocable trust. A revocable trust becomes irrevocable upon death of the grantor.
However, whenever you do a trust you need to read the trust thoroughly and do not use forms. Go to an estate planning lawyer who is familiar with the laws of your state. Each state is different in regards to the laws governing trusts.
I understand if you have a trust set up it cannot be changed when one spouse passes. For example, if both husband and wife set up a trust and name oldest child to manage youngest child's money (let's say youngest is not financially stable at this time but might be in 10 years). If one spouse dies then that can never be altered? What happens if 10 years go by and youngest becomes more stable and you don't want their inheritance handled anymore by oldest? Am I missing something? This is an issue my friend is going through and I just truly don't get it. Why would anyone make a will or trust that way? Can someone explain please? Thank you.
I always thought that anyone's Last Will & Testament could only be changed in limited circumstances such as the beneficiaries' decide to pass on the inheritance therefore the lot is defaulted under the natural order of things (next of kin, etc.) The only person who can alter the document is the people who signed it unless such allowment is outlined in the text. A Last Will & Testament is very strict. I wouldn't challenge one.
Last edited by LegitBusiness; 06-01-2017 at 04:10 AM..
I always thought that anyone's Last Will & Testament could only be changed in limited circumstances such as the beneficiaries' decide to pass on the inheritance therefore the lot is defaulted under the natural order of things (next of kin, etc.) The only person who can alter the document is the people who signed it unless such allowment is outlined in the text. A Last Will & Testament is very strict. I wouldn't challenge one.
The last Will and Testament is not a Trust. You are correct about a Will. If the executor or beneficiary disagree they will have to go to court for a resolution.
Beneficiaries of a will and people appointed in a will can always decline on their own.
Thank you for your responses. I was abe to find out some more info too. I guess it makes sense that it cannot be changed if one spouse passes because a trust is a will but for both parties. However, according to her lawyer, if one spouse passes and the son becomes more stable and the surviving spouse wants to dissolve the need for the trustee, then remaining spouse has some options. One is to let oldest son know her wishes. He can give his brother outright his share. She can put it in writing, even though trust can't be changed, all parties will be aware of remaining spouses wishes. Or, they can name this son as a beneficiary on an existing account that's not in the trust. In effect, giving him the correct percentage outright.
It sort of makes sense. I'm still not sure I would like not being able to change anything in my will because it's in a trust and my spouse passed.
Thank you for your responses. I was abe to find out some more info too. I guess it makes sense that it cannot be changed if one spouse passes because a trust is a will but for both parties. However, according to her lawyer, if one spouse passes and the son becomes more stable and the surviving spouse wants to dissolve the need for the trustee, then remaining spouse has some options. One is to let oldest son know her wishes. He can give his brother outright his share. She can put it in writing, even though trust can't be changed, all parties will be aware of remaining spouses wishes. Or, they can name this son as a beneficiary on an existing account that's not in the trust. In effect, giving him the correct percentage outright.
It sort of makes sense. I'm still not sure I would like not being able to change anything in my will because it's in a trust and my spouse passed.
No, a trust is NOT a will. A trust should be funded immediately after it is signed by all involved parties. What that means is that any real property must be titled in the name of the trust, as should all financial accounts and personal property. Any subsequent property transactions will be in the name of the trust. If it is a living or revocable trust, it can be amended or terminated by the trustee (you) during your life. If the trust is irrevocable, then it can generally not be amended or ended during your life. When you die, the trust assets will be distributed (or not) according to the language of the trust. What powers you wish to grant to the successor trustee should be incorporated in the initial trust language, and those will describe what that trustee can do.
Assets in a trust are not subject to distributions described in a will, although they are considered assets of the estate for tax and debt purposes. If you don't transfer your assets to the trust, then those assets will pass through your will or intestacy laws. So, you would need both.
Without a trust, your assets remain your assets until you gift them or die. Any transaction are done in your name. A will dictates how your assets will be distributed after your death. It can be revoked, amended and/or rewritten at any time prior to your death. You can have joint wills between spouses, which is a terrible idea. A will should be for an individual, even if spouses' wills are nearly identical. A will describes who gets what and what share. You can have what is called a 'springing trust,' which is a trust that springs into being when you die and becomes the recipient of your assets. From that point, the trust determines distributions. Once a will is executed, it describes how your assets will be distributed, although that can be changed at any time.
There is no simple answer. You have to decide what it is you want to accomplish and then meet with a probate and estate attorney to determine what is the best method to meet your goals.
A surviving grantor trustee in a joint (2 person) trust can form a new trust, move the assets of the old trust to the new one. In effect the old trust dies.
Thank you very much for your answers. Jiminnm, you have given me a lot to absorb, since this is a bit foreign to me and confusing. I appreciate the time you took to respond.
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