What happens to a trust when the surviving spouse dies?
Upon the death of the surviving spouse, the trust is typically divided into shares for the children of the decedent. If a surviving spouse is the trustee of this trust, the other beneficiaries may question the surviving spouse’s investment strategy and discretion over distributions, particularly because the surviving spouse is also a beneficiary.
What happens to the beneficiary’s share in a trust?
The beneficiary’s share may pass to his surviving children. The beneficiary’s share may pass to his surviving siblings. The beneficiary’s share may pass to a charitable organization named by the decedent. The beneficiary’s share may revert to a common pot for the benefit of multiple beneficiaries.
Can a disclaimer trust give the surviving spouse limited power of appointment?
Unlike a credit shelter type trust, a disclaimer trust cannot give the surviving spouse a limited power of appointment (so that the spouse cannot control the distribution of the disclaimed assets).
Can a surviving spouse have unlimited access to a trust principal?
First, a surviving spouse may resent not having unlimited access to the trust principal.
The beneficiary’s share may pass to his surviving children. The beneficiary’s share may pass to his surviving siblings. The beneficiary’s share may pass to a charitable organization named by the decedent. The beneficiary’s share may revert to a common pot for the benefit of multiple beneficiaries.
What happens to a trust if one spouse dies?
Generally, if one spouse dies, the trust doesn’t require any further action from the surviving spouse. However, all trust terms are different, and it is important to follow the terms set forth in the specific trust.
Can a deceased spouse cancel a revocable trust?
The trust’s terms may dictate that the surviving spouse cannot change or cancel that portion of the trust agreement. Similarly, if each spouse has separate property in the trust, the trust terms can dictate that the surviving spouse cannot cancel or amend the part of the trust agreement that deals with the deceased spouse’s separate property.
How does an inheritance pass to a beneficiary?
That is, the trust might say that the undistributed inheritance passes in any of the following ways: (1) to the deceased daughter’s estate, as is usually the case; (2) to an alternative beneficiary named in the parent’s trust; or (3) to alternative beneficiaries named by the deceased daughter if allowed by the mother’s trust instrument.