For blended families, a joint living trust can protect your estate plan. When the first spouse dies, their assets move into an irrevocable trust. The surviving spouse gets the income for life, but can't touch the principal, which goes to all three children when they die.
I've been married to my second wife for 17 years. I have 2 children from my first marriage, and my wife has 1 child from her first marriage. We've agreed to give everything to our 3 kids after the second of us dies. Is there a way to protect that plan? That's what I heard today from one of my clients. And the answer to that is yes. You could both create a trust while you're still alive that says after the first death, an irrevocable trust will be created to hold the assets of the person who died. The income from those assets would go to the surviving spouse during their lifetime. And at their death, all the principal in that trust would then be passed on to the kids. The big benefit there is that the surviving spouse will be the sole beneficiary of that trust for so long as they shall live. And at the death of the surviving spouse, it all would go to the kids as you originally planned. And that trust cannot be changed by the surviving spouse. If you want to learn more, join my school community in my bio link.
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