There can be some rather complicated estate planning situations that can arise when families blend. As we all know, a significant percentage of marriages end in divorce, and many divorced people with children wind up getting remarried.
Before we get into the value of qualified terminable interest property trusts, we should touch upon the fact that the majority of second marriages fail, and even more third marriages do not withstand the test of time. When you are making financial decisions as you enter another marriage, you may want to keep these statistics in mind. A premarital agreement can sometimes protect all parties.
Protecting Your Children
If you get remarried, and you leave everything to your new spouse, your children are being placed at risk. There is really no way of knowing how your spouse would respond after you are gone. He or she could get remarried, and your resources could be absorbed by another family. In addition to this, your spouse may or may not have a good relationship with your children.
To make sure that your children receive the inheritances that you want to leave to them, you could establish a qualified terminable interest property trust. Because of the wordy name, these devices are often called QTIP trusts.
You fund the trust, and your spouse would be the first beneficiary. If you predecease your spouse, the trustee that you name in the trust declaration could distribute the earnings from the trust to your spouse for the remainder of his or her life. Your spouse would be cared for, and he or she could also use any real property that you may have conveyed into the trust.
The children that you want to protect would be the final beneficiaries of the QTIP trust. Your spouse would have no ability to change the terms of the trust, and he or she would not be able to sell real property that was contained in the trust.
After the death of your spouse, your children would assume ownership of assets that remain in the trust.
Attend a Free Estate Planning Seminar
Now that you know little bit about qualified terminable interest property trusts, you may have an appetite for more information about the estate planning strategies that can be implemented. If you would like to take the next step with regard to information gathering, attend one of our free estate planning seminars.
We offer these seminars on an ongoing basis throughout the greater Naples/Fort Myers area, so you should be able to identify a session that will fit into your schedule.
Though the seminars are absolutely free to attend, we do ask that you register in advance so that we can reserve space for you. Click the following link to see the schedule and obtain more details and registration information: Naples FL Estate Planning Seminars.