Do all wealthy people have marital trusts? How does that work?

[Anonymous]

There is so much minsinformation here, I don’t even know where to start. This is not a good place to ask a question like this.

[Anonymous]

Anonymous wrote:There is so much minsinformation here, I don’t even know where to start. This is not a good place to ask a question like this.

Exactly. People should consult professionals. I am a lawyer + DH an MBA, and we are getting ours done now working with a trust attorney, our banks and our investment advisor. Complicated studd.

[Anonymous]

^ complicated "stuff" not "studd"

[Anonymous]

Want your money to take care of a spouse during his lifetime but make sure the remainder goes to your kids at his death? Use a marital trust.

Have young kids and if both you and DH die while the kids are minors, do you need funds managed by a responsible party until they are launched into adulthood? There's a testamenty trust for that.

Own property in multiple states and want to avoid the hassle and expense of ancillary probate? Check out revocable trusts.

Or, just see your attorney.

[Anonymous]

Anonymous wrote:I don't understand why a trust is necessary. If your spouse is your designated beneficiary on all accounts, there will be nothing to go through probate - it will all automatically go to the beneficiary.

yes, you are correct. It was easy.

[Anonymous]

^^with just a will

[Anonymous]

A few advantages of the trust

- You pay no state income tax on millions of dollars
- You rent your own home back from the trust and you default on the rent. The trust becomes a creditor to your estate when you die.
- If you both die you can be sure the money is managed in a certain way
- If a spouse remarried after your death you can protect it better
- Each kid gets their own money, no fighting needed
- If you have some esoteric tax situations you can save enormous sums of money.

[Anonymous]

We have several trusts:

Regular revocable for probate avoidance
Spousal lifetime annuity trust. You out assets that are expected to appreciate a lot to get them out of your estate when the value is low.
ILIT - life insurance trust. AKA a crummey trust.

[Anonymous]

A trust boils down to two things; control of where $ goes after you die and privacy.

[Anonymous]

Anonymous wrote:We have my husband’s life insurance payout going into a trust, if he were to die, but otherwise everything else (10s of millions) just goes straight to me. I believe that is for tax purposes. If we both die, our money goes into a trust because we don’t want our child to have access to such a large amount of money all at once or in her twenties.

Where does that leave your step children?

[Anonymous]

Anonymous wrote:

Anonymous wrote:We have my husband’s life insurance payout going into a trust, if he were to die, but otherwise everything else (10s of millions) just goes straight to me. I believe that is for tax purposes. If we both die, our money goes into a trust because we don’t want our child to have access to such a large amount of money all at once or in her twenties.

Where does that leave your step children?

NP. Who said anything about step children? OP is saying they have one child. The question arises when one spouse dies and the other remains: does the revocable trust then become irrevocable?

[Anonymous]

Anonymous wrote:

Anonymous wrote:We have my husband’s life insurance payout going into a trust, if he were to die, but otherwise everything else (10s of millions) just goes straight to me. I believe that is for tax purposes. If we both die, our money goes into a trust because we don’t want our child to have access to such a large amount of money all at once or in her twenties.

Where does that leave your step children?

Interesting you ask.

We have a step child and our assets go to our children. We set up a separate account for the step child since that child has another parent leaving them money and my spouses money is not going to that child.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We have my husband’s life insurance payout going into a trust, if he were to die, but otherwise everything else (10s of millions) just goes straight to me. I believe that is for tax purposes. If we both die, our money goes into a trust because we don’t want our child to have access to such a large amount of money all at once or in her twenties.

Where does that leave your step children?

Interesting you ask.

We have a step child and our assets go to our children. We set up a separate account for the step child since that child has another parent leaving them money and my spouses money is not going to that child.

So who is funding that separate account for the step child- a spouse to whom the child is biological ? Is your spouse a biological parent of the child? So you set up the trust to ensure nothing that’s earned by your spouse (who also has another bio child ) after the point he married you goes to their biological child? That’s wicked

[Anonymous]

Anonymous wrote:

Anonymous wrote:We have my husband’s life insurance payout going into a trust, if he were to die, but otherwise everything else (10s of millions) just goes straight to me. I believe that is for tax purposes. If we both die, our money goes into a trust because we don’t want our child to have access to such a large amount of money all at once or in her twenties.

Where does that leave your step children?

I’m PP. I don’t understand this question? There are no step children.