When a spouse has children from a prior marriage, it can be difficult to balance the interests of the surviving spouse and those of the children from the prior marriage. Sometimes, simply stating that the surviving spouse can receive income and invade principal for health, education, maintenance, and support is not sufficient.
In such a situation, a few other options to consider may include:
1. Naming an independent trustee who can be more neutral in making distributions to the surviving spouse during his or her lifetime. Even better, perhaps the trust can name a professional fiduciary to determine the amount of these distributions.
2. Provide for unitrust payments so there is no dispute about whether investments favor income (which may favor the surviving spouse) over growth (which is what the beneficiaries hope to receive in the future when they inherit the remainder).
3. Avoid split-interest trusts altogether and provide a lump sum gift to the surviving spouse with the remainder to the children so the children no longer have to wait for the surviving spouse to pass in order to inherit the remainder. Additionally, the surviving spouse does not have to worry their distributions would be challenged by the children.
4. For assets held in a bypass trust, provide for fixed income payments to be paid to the surviving spouse with any excess income paid to the children. This may be appropriate if the surviving spouse had other sources of income. This will not work for Q-tip trusts which require all income to be paid to the surviving spouse.
We hope this helps you help others.
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