QTIP Trust and Pre-Nup Can Cover All Bases
There are those who relate the principle of the premarital arrangement with the weakening of true love, however this impression is now beginning to soften. The truth is that if all marital unions were very first marriages taking place between two young grownups with no kids and no considerable individual assets a prenuptial agreement might certainly seem unnecessary. But these days, marriage is merely not the very same institution that it was in years passed.
Data inform us that almost half of all very first marital relationships end in divorce, and three out of four of these people consequently remarry. In the majority of cases at least among them had children from a previous marital relationship or marital relationships.
To tack on another relevant reality, most of second and 3rd marital relationships do not last. So when you absorb the odds, participating in a remarriage without a prenuptial agreement in location might be reckless.
Even if you are certain that “this is the one,” how can you make sure that your new spouse will look after your kids as you would if you were to be killed in a car accident a month into the marriage? Your partner’s family might argue that your different property has actually been transformed to community property.
One method to manage a remarriage with complete stability from an estate planning point of view is to execute a prenuptial agreement that defines your different property as you get in the union. You can work with your estate planning attorney to produce a certified terminable interest property trust, a lorry that is typically described as a “QTIP” trust.
The method a QTIP trust works is that you money the trust and call your beneficiaries, who would probably be your children. If you predecease your partner she or he gets all of the earnings 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 presume ownership of the trust properties in accordance with your desires.