Blended Family? How Trusts Can Help Your Children?
In Virginia, as elsewhere, asset protection is paramount in blended families. Without the right plan, the current spouse is entitled to a share of the estate, which could prevent children from a previous marriage from receiving the inheritance intended. An estate planning lawyer helps the estate owner protect their assets and set up a legal plan to distribute their wealth on their terms.
How Does an Irrevocable Trust Work?
An irrevocable trust is a method of separating assets from the estate. The establishment indicates the trust owns the assets or property, and the estate owner is no longer listed as the owner. However, he or she maintains full control over the assets. When managing assignments for a blended family, the estate owner could set up an irrevocable trust for their spouse or biological children. Once the estate owner dies, the beneficiary is identified as their successor, and the new owner acquires control over the assets.
Managing Trust Funds
Trust funds are a beneficial option for providing monetary assets to a child or spouse. The trusts are set up in the beneficiary’s name. The estate owner has the right to deposit funds into the trust at any time. An executor manages the distribution of the trust fund, and the wealth is protected from all other parties.
AB Trusts for the Current Spouse
An AB trust allows the estate owner to protect their share of the estate from the previous spouse. The lawyer sets up the trust and includes provisions. Typically, the current spouse receives full control of the wealth and assets until they die. Any wealth or assets that remain when the current spouse dies, are transferred to the estate owner’s biological children.
What Happens with ABC Trusts?
A lawyer helps set up an ABC trust to protect the assets for the current spouse and the estate owner’s biological children from all marriages. It provides the current spouse with full access and control over the estate owner’s assets and wealth including their marital home and additional real properties that they own. However, any assignments included in the estate owner’s will are upheld.
The estate owner’s biological children receive a portion of their life insurance benefits. The current spouse receives the remaining balance of the life insurance benefits. If the current spouse dies, all remaining proceeds from life insurance policies and all other assets are divided among the biological children of the estate owner.
In Virginia, planning strategies protect assets for the estate owner’s current spouse and their biological children. Typically, stepchildren don’t receive any portion of the assets or wealth. However, a plan must be in place to prevent legal claims by either spouse for any children that aren’t biologically linked to the owner. To start a plan for asset protection with an estate planning attorney Fairfax, VA, contact Robert B. Walker now.