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Estate Planning & Marriages

The beauty of the Peninsula creates picturesque backdrops for weddings. Couples from around the US and the world gather here with their families to start the new chapter of their lives. This chapter may be their first regarding marriage or it may be their second or third.  When marrying, careful consideration must be made regarding your Estate Planning. If this is your first marriage or if this not your first dance, you must consider the following. Do you have significant assets you are bringing into the marriage, do you have children from a previous marriage, will you be inheriting a significant amount of assets from your parents or other family members, and do you have children from a previous marriage to ask a few?

The answers to these questions will allow your Estate Planning Attorney to best guide you when crafting your Estate Plan.  Which type of a trust or combination of trusts will best fit your needs and intent. California is a Community Property state, which means assets you accumulate as a married couple, including income, are community assets – which means 50/50.  However, assets you bring into a marriage, or you inherit, or are gifted to you, or you accumulate after legal separation are your separate property assets, which should not be divided up in a divorce.  Unfortunately, contention does arise around what was truly “separate” from the community.

Separate Property Trust

A separate property trust is a revocable trust where you hold assets with true separate property characteristics. This type of trust is perfect for holding assets accumulated before marriage, assets you have inherited, or assets you were gifted. You would nominate beneficiaries for your separate property trust, of your choice. This trust would be that much more powerful if you had a prenuptial agreement set up before marriage.  The separate property trust can be drafted such that, if you pass and are still married, you can assign part of the income derived from the trust to the surviving widowed spouse.  This is a thoughtful way to show your widowed spouse that you care for them.

A/B Trusts or Qualified Terminable Interest Trusts

Both of these trusts are revocable trusts set up while you are alive and part(s) of them become irrevocable when one spouse passes. Sometimes, couples fear if they pass first, the surviving spouse may re-marry.  The common fear here is the new spouse will take all the assets away.  As mentioned above, California being a Community Property state, we can assign our 50% interest of the assets, if we pass, to be held in an irrevocable portion of the original trust for the children.  Thus, the terms of the irrevocable portion cannot be changed by the surviving spouse and the new spouses’ hands would remain off of your 50%.

Estate Planning is an empowering topic, but needs to be handled delicately when you have assets you are bringing to a marriage or you have children and are re-marrying. You must speak to a qualified Estate Planning Attorney as well as a Family Law Attorney to get the best guidance on how to protect your hard earned assets.


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