Gain insight into the issues that can arise from relationships between a trustor and trustee. From John Pakauski’s book, “Pankauski’s Trustee’s Guide.”
Marital Trust Issues | Palm Beach Marriage
People are having multiple marriages and multiple families. The “traditional” family doesn’t seem to exist anymore. Ironically the dysfunctional family is now the traditional family. While a trustee doesn’t necessarily get “battle pay”, a trustee gets the most action from trusts which benefit second and third spouses and children from a prior relationship.
Consider the typical Palm Beach marriage involving a marital trusts: the well-off 70 year old male divorces his spouse, with whom he has had two children, and remarries – a thirty year old un-employed bombshell. The adult children from the grantor’s first marriage are in their mid 40’s and have children of their own. The adult children know that the young surviving spouse has a long life expectancy and that they won’t see a dime of the marital trust, if at all, until her demise – which could be decades from now. The surviving spouse may want to live off that trust and may have no other means of income or support. The children will be angered by the surviving spouse’s use of those trust funds and want to scrutinize each principal distribution which is given to her. A distant or cool relationship between the adult children and the surviving spouse will turn to cold, bitter feelings, which later turn to outright animosity. Imagine how the relationship only worsens when the surviving spouse takes up with a perceived ne’er-do-well, or a handsome golf pro, fisherman or trainer, as a lover, or, worse, a new spouse. Marital trusts typically provide no restriction or termination of rights if the surviving spouse lives with someone, or remarries. Do you, the trustee, really want to be the referee in this type of scenario?