top of page

What to Know About Marital Trusts

Review of documents with eyeglasses

A marital trust is a certain type of irrevocable trust that lets you transfer your assets to your surviving spouse tax free. It could also protect the estate of the surviving spouse before the remaining assets pass on to your kids. We will explain how a marital trust works and how you could create one.

What Exactly Is a Marital Trust?

Before we go into the marital trust fund, you should be aware of some of the common wording you will most likely run into during the process. We have defined some of the most common terminology below.

A trust grantor is the person who establishes the trust.

The beneficiary is the surviving spouse who benefits from the marital trust when the trust grantor passes away. Inside of the framework of a marital trust, the surviving spouse needs to be the sole beneficiary who could get trust assets during the rest of his or her lifetime.

The trustee is the person, group or organization who manages the trust assets. The trustee will transfer property to the beneficiary. A marital trust needs to have at least one named trustee in order to be valid.

The principal is known as the assets initially put into the trust. As these could be investment products, the trust could produce income during the lifetime of the beneficiary.

How a Marital Trust Works

You could create a marital trust with the help of our attorneys who specialize in estate planning. The trust document needs to specify all assets and property held in the trust. This could include nearly anything of value such as bonds, stocks, mutual funds, physical property and cash.

When the trust grantor passes away, the trust assets pass on to the surviving spouse without tax. This means that the IRS will not level federal estate taxes on those assets. So neither spouse will owe taxes on the transfer.

The surviving spouse could get income from the trust as well as principal. The trust grantor could give the trustee the right to transfer some of the trust’s principal or initial investment to the surviving spouse in case a special need arises. The trust creator could also give the surviving spouse general power of appointment. This lets the surviving spouse instruct the trustee to transfer the trust assets. But the grantor might limit the withdrawal to a set amount.

In many cases, the trust assets will pass on to the spouses’ kids or other family members when the surviving spouse passes. But the rules of various types of marital trusts dictate who can be named beneficiary after the surviving spouse’s death.

Click here to learn 7 things you need to know about trusts!

How to Create a Marital Trust

Because a trust could be a complex entity, so it is smart to seek the help of our qualified attorneys who are versed in estate planning.

Do you have a question about marital trusts? Click here to contact the experts at Hunsberger Dunn LLP today!


bottom of page