First, let me explain the “usual” situation. A married couple creates a Joint Revocable Living Trust. Think of this Revocable Living Trust as a single bucket. This Trust, or bucket, holds whatever property the couple decides to put into it. Usually, the couple gives everything to the surviving spouse, and the surviving spouse can use all of the assets and decide who is to receive the remaining assets or even revoke the Trust. It is a Revocable Living Trust after all.
Now let us consider the following scenario: a person remarries with children from the previous marriage. The new spouse may or may not have children of their own. How does such a “blended family” plan their estate so that children from previous marriages don’t get cut out? An A-B Trust may be a good solution to such a thing.
So let’s think of an A/B Trust as a bucket with a dotted line down the middle. Each spouse puts property into the bucket (the A/B Trust), and is free to do with it what they like while both spouses are alive. Upon the first spouse to die, their half of the bucket – the B Trust – solidifies and cannot be changed by the surviving spouse. The A Trust, or the survivors Trust, remains in the control of the surviving spouse. Usually the surviving spouse can continue to live in the family residence, and have access to other assets provided the Trust is drafted in such a manner.
The answer to this question is that an A/B Trust is a good tool to use in “blended family” situations, but it is only one option. The facts of your particular situation will guide how the Estate Plan should be drafted.
Please feel free to give me a call and we can establish your Living Revocable Trust or other estate planning objectives today. If you have specific estate planning goals, I can help create solutions you may not be aware of.
See lots of estate planning information on my website at: www.myestate-plan.com
Thanks for reading my blog.
William Daniel Powell
This document is for informational purposes only. Nothing in this is to be considered legal advice. Nothing in this shall create an attorney/client relationship, nor shall it create a confidential relationship. If you need legal advice (in California), feel free to contact me or someone licensed to practice in your jurisdiction. I assume no liability or responsibility for actions taken, or not taken, as a result of reading this information.
Also, please remember that I speak in generalities in my blog and my website. There are so many different factors that can contribute and completely change the outcome that it would be impractical to discuss all of them here.