QTIP Trust and Pre-Nup Can Cover All Bases
There are those who equate the principle of the premarital contract with the undermining of true love, but this impression is now beginning to soften. The truth is that if all marital unions were first marriages occurring in between two young grownups without any kids and no significant individual assets a prenuptial contract might certainly seem unnecessary. However nowadays, marriage is merely not the very same institution that it was in years passed.
Stats tell us that almost half of all very first marital relationships end in divorce, and three out of 4 of these people subsequently remarry. At least one of them had children from a previous marital relationship or marital relationships.
To add another appropriate truth, most of second and third marriages do not last. When you absorb the chances, getting in into a remarriage without a prenuptial agreement in place might be reckless.
Even if you are particular that “this is the one,” how can you make certain that your new partner will look after your kids as you would if you were to be killed in a car mishap a month into the marital relationship? Your partner’s family might argue that your different property has actually been transformed to community property.
One way to manage a remarriage with complete integrity from an estate planning viewpoint is to carry out a prenuptial arrangement that defines your different property as you get in the union. You can work with your estate planning attorney to create a certified terminable interest property trust, an automobile that is often described as a “QTIP” trust.
The method a QTIP trust works is that you money the trust and call your recipients, who would presumably be your children. If you predecease your spouse she or he gets all of the income from the trust for life and minimal or no access to the principal (you choose), however has no say with regard to inheritance of the balance of principal properties. When the enduring spouse passes away, your kids assume ownership of the trust possessions in accordance with your dreams.