Last Will and Testament

All Tangible Personal Property to Spouse

At Predeceasing Spouse’s Death

Family Trust

Receives the maximum applicable exclusion amount ($11.18 million in 2018). This trust holds assets for benefit of the surviving spouse and the children, but the surviving spouse will be named as the primary beneficiary. If the surviving spouse serves as the sole trustee, distributions of income and principal must be limited to amounts necessary for a beneficiary’s health, education, maintenance, and support. Also, to prevent adverse tax consequences, the surviving spouse will not be authorized to make any distributions to the children while they are minors.

Residuary Marital Trust

Holds the balance of the predeceasing spouse’s residuary estate in a Marital Trust for the sole benefit of the surviving spouse. Income will be payable to the surviving spouse. In addition, the surviving spouse may receive discretionary distributions of principal. The value of this trust, as of the surviving spouse’s death, will be included in the surviving spouse’s estate for estate tax purposes.

At Surviving Spouse’s Death

Separate Trusts For Children

Upon the surviving spouse’s death, the remaining assets are divided into equal shares for the children. These trusts provide enhanced creditor protection and asset management. There will be a separate trust for each child, and that trust will hold assets for his or her benefit. These trusts may exist until the child reaches a specific age, or for his or her lifetime. Additionally, distributions may be subject to customized conditions. Typically, these trusts will allow distributions for a child’s needs (such as a down payment on a home, education, health, etc.). Upon a child’s death, his or her separate trust will be divided and distributed equally among his or her living descendants (i.e., the client’s grandchildren or great-grandchildren).