Second Marriages & Marital Trusts–financial tension in Florida

Many Florida estate planning attorneys prepare revocable or living trusts for clients.  Often, there are “formula”clauses in these trust documents. These formula clauses tell the trustee how to divide the trust when the grantor, or creator, of the trust passes.  Typically, you split the revocable trust into two shares or two other trusts: a Family Trust and a Marital Trust. The Marital Trust is intended to qualify for the estate tax benefit of the unlimited federal marital deduction.  This means that the Marital Trust is not, in reality, subject to estate tax until the death of the surviving spouse.  In other words, the dead person’s estate doesn’t pay tax on the Marital Trust assets at death:  you “delay” the payment of taxes until the surviving spouse dies.  Not a bad deal.  Unless you are the children of the dead person’s first marriage, who only receive any interest in that Marital Trust AFTER the death of the surviving spouse. Many times, Florida residents who prepare an estate plan don’t let their children or grandchildren inherit until after the death of the surviving spouse:  who may not be the children’s mother, but rather a second spouse (or third or fourth).   Marital Trusts can then create a financial “friction” between the surviving spouse, who “gets” money now, versus the adult children, who receive trust funds only upon the death of the surviving spouse.  Financial tension in Florida.  Knowing how to deal with this type of trust is important for trust beneficiaries.  Know your trust beneficiary bill of rights.   Knowing how to deal with this type of trust is even MORE important for Florida probate litigators.  Many trust trial attorneys in Palm Beach County know this.  Advocate hard.  Litigate smart.