November 22, 2017

What Is a Marital Trust and How Can It Benefit You?

The Benefits of a Marital Trust

If you have worked hard to build a comfortable lifestyle for you and your spouse, you want to take all possible measures to ensure that when you are gone your partner can continue to live according to the standards to which they are accustomed. Federal estate taxes can take a hefty chunk of your net worth. Fortunately, with proper planning you can shelter a substantial amount of your net worth until the death of your spouse using what is known as a marital trust.

When you create a trust, you have simply created a new legal entity that has the right to own property. With a marital trust, you have not transferred property to your spouse, but to a separate legal entity that holds the property for the benefit of your spouse. Your spouse will enjoy all the rights to use the property owned by the trust, but will not incur any estate tax liability for the assets in the trust, even if the value of the trust exceeds the estate tax exemption amount.

With a simple marital trust, your spouse has the right to name the beneficiaries of any property remaining at his or her death. There are, however, ways you can provide for your spouse without giving your spouse control over the remaining trust assets:

  • A QTIP (Qualified Terminable Interest Property) trust has the same effect as a simple marital trust except that it allows you to designate what happens to any remaining assets upon the death of your spouse.
  • A bypass trust will allow you to put property in trust for the ultimate benefit of a third person or a charity, but give your spouse the right to benefit from trust assets during his or her life.

Contact Us

At Halligan & Keaton, in Media, Pennsylvania, we have more than 60 years of combined legal experience. We provide a free initial consultation to every client. To discuss your estate planning needs with an experienced lawyer, call our office at 610-566-6030 or contact us online. We will travel to your home, a long-term care facility or the hospital to meet with you.