Survivor's Trust
Overview
A Survivor's Trust is a specific type of trust arrangement that comes into effect after the death of the first spouse in a married couple's estate plan. It is typically created as part of an AB Trust or ABC Trust structure and contains the surviving spouse's share of the couple's community property and their separate property.
Key Components and Features
Basic Structure
- The trust holds assets that belong to the surviving spouse
- Typically includes the surviving spouse's half of community property
- May include the deceased spouse's share up to the estate tax exemption
- The surviving spouse maintains complete control over these assets
Primary Benefits
-
Flexibility in Asset Management
- Full control over trust assets
- Ability to change beneficiaries
- Power to withdraw or use assets as needed
-
Tax Advantages
- Assets receive a step-up in basis at the death of both spouses
- Can help minimize estate taxes
- Preserves estate tax exemption opportunities
Common Duties and Rights of the Surviving Spouse
Control Rights
- Complete access to trust principal and income
- Authority to modify trust terms
- Power to name new beneficiaries
- Right to sell or transfer assets
Management Responsibilities
- Maintaining accurate records
- Filing appropriate tax returns
- Managing investments
- Making distribution decisions
Differences from Similar Trusts
Survivor's Trust vs. Bypass Trust
- Survivor's Trust: Full control by surviving spouse
- Bypass Trust: Irrevocable with limited access
Survivor's Trust vs. QTIP Trust
- Survivor's Trust: Unlimited control and access
- QTIP Trust: Income rights only, no control over principal
Frequently Asked Questions
Q1: Can a Survivor's Trust be modified?
A: Yes, the surviving spouse typically has full power to modify or revoke the Survivor's Trust.
Q2: Are assets in a Survivor's Trust protected from creditors?
A: Generally, assets in a Survivor's Trust have limited protection from creditors since the surviving spouse has complete control.
Q3: What happens to the Survivor's Trust after the second spouse dies?
A: The assets are distributed according to the trust terms, typically to the named beneficiaries.
Summary and Importance
Understanding the Survivor's Trust is crucial for effective estate planning, particularly for married couples. It provides:
- Maximum flexibility for the surviving spouse
- Potential tax benefits
- Clear asset management structure
- Protection of the deceased spouse's wishes while maintaining survivor control
Note: Estate planning laws vary by state and change over time. Consult with a qualified attorney for specific advice regarding your situation.
Key Takeaways
- Offers complete control to surviving spouse
- Part of larger trust strategies
- Provides important tax planning opportunities
- Maintains flexibility for future changes
- Essential component of many married couples' estate plans
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Related Terms
Here are some related terms that are relevant to the estate planning term "Survivor's Trust":
Synonyms:
- Marital Trust
- Spousal Trust
- Surviving Spouse's Trust
Antonyms:
- Bypass Trust
- Credit Shelter Trust
- Family Trust
Frequently Used Terms:
- Estate Planning
- Asset Management
- Inheritance
- Probate
- Testamentary Trust
- Revocable Living Trust
- Irrevocable Trust
- QTIP Trust
- AB Trust
- ABC Trust
Similar Concepts:
- Revocable Trust
- Irrevocable Trust
- Testamentary Trust
- Grantor Trust
- Beneficiary Trust
- Charitable Trust
These related terms cover a range of concepts and structures within the broader field of estate planning, providing context and additional information that may be useful for understanding the Survivor's Trust.
