Protecting Mom’s Future – Estate Planning for the Surviving Spouse | Estate Plan Pros
Protecting Mom’s Future – Estate Planning for the Surviving Spouse

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According to the Census Bureau, 56% of surviving spouses over age 65 are women.  When it comes to estate planning for the surviving spouse, you can use your trust to give them extra protection.

Direct

Some couples prefer the simplicity of having everything go to the surviving spouse outright.  If that is your preference, and you have an older trust, it is worth having it reviewed.  The default option not that long ago was to set everyone up with an “A-B” trust, splitting the trust in two at the death of the first spouse.  The estate tax reason for doing that has disappeared, leaving you free to update the trust to simplify things for your surviving spouse.  But before you pick up the phone to make that change, read on.

Surviving Spouse’s Protection Trust

The trouble with the simple direct option is that if your surviving spouse can do anything she wants with the money, so can all her creditors and predators.  So instead, we put the deceased spouse's part of the estate into a separate irrevocable trust. 

Co-Trustee

With a separate trust, you can include a co-trustee.  The co-trustee is there as a safeguard against creditors trying to reach the money.  But what happens when mom is ready to buy a new car, and the co-trustee says, “no”?  Mom gets to say two important words to the co-trustee, “You’re fired” and go find a new co-trustee.

The co-trustee gets to act as the “bad guy” and say no to all the creditors and predators that are trying to reach mom’s money. 

Protecting the Kids Too

If mom finds a new special guy, the Protection Trust can be set up to protect that portion of the estate for the couple’s children.  For example, the trust can expand the definition of “remarriage” to include spending the night with someone.  Following that the trust can be set up to protect the principle for the duration of the relationship, or end that portion of the trust, and distribute the balance to the children.

Families have different goals and priorities, and as the options above illustrate, not everyone will want the same thing for their family situation.  It’s important to know what kind of plan you have, and have a conversation with your attorney about what your goals for the future look like.

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Erik Hartstrom

Erik is the founder of Estate Plan Pros, a leading estate planning practice in Elk Grove.  Erik’s practice focuses on Estate Planning Law. In Estate Planning, Erik works with clients to make the process simple, so clients can focus on more important things. He is a local authority for specialized estate planning instruments, like Special Needs Trust, Irrevocable Trusts, or other focused documents. Erik has litigated, negotiated, and mediated the gamut of family law cases. With this unique perspective as a family law and estate attorney he can often spot issues otherwise overlooked. Prior to graduating he worked as a legislative analyst for a non-profit organization, and volunteered as a youth counselor. Erik currently participates in local politics and is an active member of his local church. Erik is very happily married and has two young sons. Together, his family loves to get outdoors and enjoy the varied activities the Sacramento region has to offer.


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