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QTIP Trust and Pre-Nup Can Cover All Bases

November 5, 2019

There are those who correspond the principle of the premarital arrangement with the weakening of real romance, however this impression is now starting to soften. The truth is that if all marital unions were very first marriages taking place between two young adults without any kids and no substantial individual possessions a prenuptial contract might certainly seem unneeded. These days, marital relationship is simply not the very same organization that it was in years gone by.

Stats inform us that almost half of all first marital relationships end in divorce, and 3 out of 4 of these individuals subsequently remarry. In many cases a minimum of among them had kids from a previous marital relationship or marital relationships.
To tack on another pertinent truth, the majority of 2nd and 3rd marriages do not last. When you digest the chances, entering into a remarriage without a prenuptial agreement in place may be reckless.

Even if you are particular that “this is the one,” how can you make sure that your brand-new spouse will take care of your children as you would if you were to be eliminated in a car mishap a month into the marital relationship? Your partner’s family might argue that your separate property has been transformed to neighborhood property.
One method to manage a remarriage with full stability from an estate planning point of view is to perform a prenuptial arrangement that defines your different property as you get in the union. You can work with your estate planning lawyer to produce a certified terminable interest property trust, a vehicle that is frequently described as a “QTIP” trust.

The method a QTIP trust works is that you fund the trust and call your beneficiaries, who would most likely be your kids. If you predecease your spouse she or he gets all of the earnings from the trust for life and restricted or no access to the principal (you decide), but has no say with regard to inheritance of the balance of primary properties. When the enduring spouse dies, your kids assume ownership of the trust possessions in accordance with your wishes.

Posted in Estate Law by Clinton Rodriguez