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Should new trust be formed?
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TOPIC: Should new trust be formed?

Should new trust be formed? 4 months, 3 weeks ago #300

My husband recently passed away. He and I had a revocable living trust, with each being trustee/primary beneficiary, Now, upon my death, our 2 children are the beneficiaries. My questions are, should I now change the trust into a different type to protect them from paying the high estate/death taxes upon my death? If so, what type trust should that be, and what would be the general cost of such a changeover? Would it be a complicated procedure? There would be no probate costs involved.
Thanks, for any information.


Re:Should new trust be formed? 4 months, 2 weeks ago #301

  • Michael Pancheri
Generally speaking, when an individual establishes a revocable living trust, the trust instrument can be amended, modified, and/or revoked during his or her lifetime. However, upon that individual's death, the trust becomes irrevocable. In that case, the beneficiaries of the trust (including a surviving spouse) cannot change the terms and provisions of the trust.

If the husband and wife establish a joint trust, certain provisions of the trust will also become irrevocable following the death of one of the spouses. In that case, the surviving spouse may be able to change the provisions dealing with his or her assets held in the trust, but not his or her deceased spouse's assets.

So, to answer your questions, it seems probable that you may not be able to change your husband's trust if he had a separate trust. If you had a joint trust with your husband, then it would be less clear as to whether you could make any changes that affect his assets. It all depends upon whether separate or joint trusts were created and the specific provisions of the trust instrument.

For those reasons, you really need to consult an attorney in your local area who is knowledgeable about these matters. He or she would be able to read the trust instrument and apply its provisions to your state law. He or she would then be in a position to discuss the provisions and advise you as to whether changes can or should be made.
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