The marital trust can be crucial part of an estate plan

On Behalf of | May 9, 2019 | trusts

Most people who engage in estate planning simply want to make sure that their loved ones are financially cared for after their passing. There are many ways to do this, of course, which is why individuals who find themselves in the midst of this process should carefully and thoroughly consider which options further their interests and the interests of their loved ones the most.

One commonly used estate-planning vehicle is the marital trust, also known as an “A” trust. Here, an individual funds a trust, which is managed for the benefit of that individual’s surviving spouse. This means that money earned from the trust will be payable to the surviving spouse. In some instances, a surviving spouse may even receive distributions of the trust’s principal. The trust then details to whom the assets will be distributed upon the surviving spouse’s death.

There are many benefits to this type of trust. To start, there is an unlimited marital deduction, which means that assets that are placed into a marital trust are not subject to taxation when managed for the benefit of a surviving spouse. Additionally, this type of trust can help a testator retain control over assets for a period of time. This is especially beneficial when he or she has children from another marriage. Under these circumstances, the individual can leave assets to a surviving spouse in the marital trust and name his or her children as heirs to the trust after that surviving spouse’s death.

As mentioned above though, this is just one of the many legal vehicles an individual can use to create a customized estate plan that meets his or her needs. By speaking with an attorney who is experienced in this field, an individual can better ensure that he or she is taking the necessary steps to protect the financial interests of his or her estate as well as his or her loved ones.