Marital Trusts in Florida — full time employment

Marital Trusts were once set up to provide for a spouse and their children. But times have changed. Find out why these trusts are often the subject of serious, and expensive, litigation. The full time employment act for probate litigators? We have previously written about trust lawsuits among a widow, or surviving spouse, and adult children. Now, let’s re-examine this Florida Legal Concept and consider why there is so much litigation — and what you can do.

How Did We Get Here?

OK, here’s the scenario which we are talking about. Mom or Dad have a few bucks and die. Their estate plan leaves money and property in a trust. For her or his surviving spouse for lifetime. If there’s anything left in the trust when spouse dies, it goes to Mom or Dad’s adult children.

Back in the 80’s and 90’s, you could only leave about $600,000 free of the estate tax. Everything over that was taxed.

The tax act of 1986 changed all that with the marital trust. If done properly, this type of trust would benefit your spouse and then go to the kids. You got a marital deduction and paid the tax when the 2nd spouse died. Sounded good , right?

Fast forward to the 2000’s and 2020’s in Florida.

Lots of people get divorced

Many re-marry.

Many 2nd spouses, or 3rd spouses, don’t like their new spouse’s children.

And vice versa.

So, why is everyone still creating a marital trust for people who don’t get along? (Want to read about a stepmother suing step-daughters? Read THIS LINK.)

(Want to read more about marital trusts? Click HERE. Want to read the Florida Trust Laws? Click HERE).

How to Avoid Marital Trusts

So, with a marital trust, the creator, or “grantor”, creates a trust. With his or her 2nd or 3rd spouse as beneficiary, along with the kids. And maybe grandchildren.

Everyone is tied financially in this trust.

Guess who’s in charge?

What frustrates adult children (a lot !) is when their parent puts their 2nd or 3rd spouse in charge. Makes the 2nd spouse the trustee. To read about how a step-parent can control your inheritance, click HERE.

Can’t you just bust up the trust and everyone takes a share? Yes, that’s possible.

You may be able to modify the trust to get that result.

If the trust has words or terms that you believe were the product of a mistake, you might be able to reform the trust.

Of course, one way to avoid all of this is to see if your parent or spouse will do something more simple. Change the estate plan. Don’t put the adult children and the spouse in the same trust. Give “X” to the spouse and “Y” to the children. Ask yourself….do they really need a trust together?