The surviving spouse can serve as the sole trustee, but cannot have any power to direct the beneficial enjoyment of the disclaimed property unless the power is limited by an “ascertainable standard.” This is necessary both to qualify the disclaimer and to avoid any taxable general power of appointment.
What happens to spousal trust When spouse dies?
On the death of your surviving spouse, the remaining assets of the testamentary spousal trust could be paid out to your children from your first marriage as per the trust deed or the assets may be paid out to successive testamentary trusts for your children.
Why would you use a disclaimer trust?
A disclaimer trust is a clause typically included in a person’s will that establishes a trust upon their death, subject to certain specifications. This allows certain assets to be moved into the trust by the surviving spouse without being subject to taxation.
Who can be trustee in a trust?
The only legal requirement in California for a person to be a trustee is that she or he is at least 18 years old and “of sound mind.” The Trustee must also be a U.S. citizen to avoid adverse tax consequences.
What happens to a revocable trust after a spouse dies?
After one spouse dies, the terms given in the revocable trust for that spouse’s particular assets must be carried out. The surviving spouse cannot alter the wishes of the deceased spouse.
Can a surviving spouse be the trustee of a marital trust?
By naming both spouses as trustees, the surviving spouse can use the trust property for his or her own benefit. It is important to remember, however, that the trust must list at least one beneficiary after both spouses die.
What happens to QTIP assets when a spouse dies?
Although the surviving spouse must receive all income from a QTIP marital trust, the creator of the trust can designate who the assets in the trust pass to when the surviving spouse dies. This prevents your assets from ending up in the hands of the new spouse or his or her relatives if your spouse remarries.
Can a trust be used to shelter assets from estate tax?
The assets will be included in the estate of the surviving spouse, who can use their applicable exclusion amount to shelter some or all of the assets from estate tax. The assets transferred to the marital trust will not be taxed at the death of the first spouse. The estate tax will be postponed until the second spouse dies.
