Legal Question in Wills and Trusts in California
Spousal Trusts
We are spouses with no children from either person. We want a trust where the surviving spouse gets total control of all the assets. If both die simultaneously then the assets would be divided as specified. Our lawyer syss there is no such thing, only an AB trust, but that doesn't give the surviving spouse total control of all assets. Neither one of us cares if what happens to the assets after the first they die.
3 Answers from Attorneys
Re: Spousal Trusts
It is very possible that you simply misunderstood your attorney. When he told you about the A-B trust, it may have been because your net estate is (or is expected to become)in excess of the limits before estate taxes kick in (currently $1m). The A-B trust divides the estate upon the death of the first spouse into a revocable trust (the "A" portion) and an irrevocable trust (the "B" portion) to avoid such taxes. The survivor may do with the A assets whatever he/she wishes, and may live on the interest, rents, etc. - plus a percentage of the principle - from the B trust.
Return to your lawyer and get a more complete explanation of why he recommended the A-B trust for you and your spouse.
Re: Spousal Trusts
I agree with the previous two answers. If your estate is in excess of $1 million, the A-B trust can save you on estate taxes.
Re: Spousal Trusts
Your lawyer is incorrect. You can have a simple trust that remains completely revocable/amendable after the first spouse dies, and becomes irrevocable only at the surviving spouse's death. It provides no protection for the first-to-die's beneficiaries, and offers no tax planning, but if these are not of concern to you, then using such a trust is no problem. They are fairly common, so check with other attorneys if yours is unfamiliar with it.
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