A “Family Trust” is an Additional Level of Protection
The Family Trust is a tool that can be used to hold and shelter half (or more) of the marital assets after the first-spouse-to-pass, so that at least some portion (usually half) of the marital assets can be set aside for the children (or other beneficiaries) of the marriage. These assets that have been set aside inside the family trust, are sheltered from taxes, lawsuits, creditors, and a surviving-spouse’s re-marriage to a second spouse. The family trust then, is a way of ensuring your children will receive at least half of their parent's joint estate.
Who Should Use Family Trusts
Both "first marriage" and "re-married" nuptials can utilize family trusts. By doing so, its a way to "have a say-so" in what happens to your share of jointly owned / marital assets if you were to die first. If you are already a widow(er), or about to get remarried, you may want to have a separate estate plan from your new spouse, or you may want to add a family-trust to joint planning with your new spouse, so that your first marriage children are protected.
Further Explanation
Family trusts protect the share of the first-spouse-to-pass from the usual default of leaving 100% of the assets to a surviving spouse when an estate plan is done. Many couples trust that the surviving-spouse between the two of them, will "stick to the plan" you both agreed to, that will "take care of the kids" should something happen to one of you. However as is often the case; people get remarried and interests change.
Family Trust Threshold
The amount of assets that can be protected by a family trust and sheltered from tax, is $5.49 Million as of this writing. Without a family trust in place, outsiders like your surviving spouse's-new-spouse, debt collectors, and lawsuit plaintiffs, could lawfully “steal” the hard earned assets your children would otherwise inherit.
Consequently, through no ill-will of the surviving spouse, and purely through lack of planning of the first-spouse-to-pass (who left 100% control of their estate to the surviving-spouse) children can end up being "accidentally" disinherited.
There are many exciting ways you can protect your family with estate planning and the family trust is just one of them!
At Family Wills and Trusts PLC, we’ll make sure that there are no gaps in your estate plan that would leave you and your family exposed to unnecessary financial waste, headaches, or stress. Request free information below or schedule an appointment to see how you can benefit from working with us.
