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Marital Trust Questions

What is a marital trust?

A marital trust is a type of trust that a married couple sets up to benefit once spouse or the other when once spouse dies. This type of trust also allows for the children of the trust to avoid probate court as well as avoiding such a huge hit when it comes to estate taxes. This type of trust also allows for the children of the trust to be taken care of even if the children are the step-children of the surviving spouse.

Can the beneficiary of a marital trust inform the trustee as to when they are allowed to invest money that is located in the trust?

The marital trust that is set up will state in it what rights that the trustee has as far as the investments of the money. The beneficiary can make any request as to how the money is invested, but in most cases the trust will be set up in a way that the trustee would have to be conservative in the way he/she invests any of the money. If the beneficiary wants to make any requests as to how the money is invested, then he/she would need to submit the request in writing to the trustee. It is routine for the trustee to provide an accounting annually to the beneficiaries.

If a person has no funds in a trust, how would the marital trust be handled?

If the person does not have any assets to be transferred into the marital trust, then there would be no trust. If there was a will and no funds transferred into the trust, then the property would pass through the will. The marital trust is set up to protect the children in the instance that a parent dies and the new spouse remarries.

If a married couple wants to go their separate ways but stay married, has a marital trust but wants to transfer the assets to the wife’s trust, would they need to dissolve the trust or just modify the trust?

If the married couple wants to change the trust to be solely in the wife’s name, then the easiest and cheapest way to do this is to just modify the current trust and make it to where the wife is the sole beneficiary. The assets in the trust can then be transferred to the wife as the married couple agreed. Once this has happened, the wife can then set up a separate trust or just keep the individual assets.

Can a trustee of a marital trust, reimburse themselves for insurance payments that they have made for children of the trust?

If the children of the beneficiary are not minors, then the beneficiary has no obligation to support them. If the children are not supposed to receive income from the trust, then the trustee would be breaching his/her financial duties by giving the children money that is owed to the beneficiary and not them. The beneficiary can sue the trustee through the probate court; having the trustee removed and making the trustee pay back all money that he/she took from the trust.

A marital trust is designed to protect the children of a person that has died from a new spouse being able to get the money that the children would be entitled to. When a marital trust is set up or a person is thinking of setting one up, questions may arise about the laws, the way to set the trust up or what rights the person has regarding the trust. When these questions arise, then the person would need to consult an Expert to gain the answers to any questions he/she may have.
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