Can My Spouse be a Trustee of the Family or Marital Trusts?

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Family TrustYes, but naming the surviving spouse, as a Trustee should be done only after reviewing all the facts and counseling with your advisors. In a “first time” marriage where both spouses have great confidence in each other, it is common for the surviving spouse to be designated as a Trustee of the Family and Marital Trusts. To maximize the creditor protection aspects of these subtrusts, it is recommended that a “friendly” co-trustee be named to serve along with the surviving spouse. The Trustees can be provided broad authority to distribute income and principal from the Family Trust to beneficiaries that may include the surviving spouse. The Marital Trust may also provide for principal distributions, but only to the surviving spouse.

There are some circumstances where it may not be preferred to have the surviving spouse serve as a Trustee of the Family and/or Marital Trusts. Perhaps a spouse has not had experience dealing with finances, maybe they have poor spending habits, or perhaps the couple is in a second or subsequent marriage. In such circumstances, the couple may prefer that an independent third party serve as Trustee. It is not advised to name a child to serve as the sole Trustee of these Trusts, since such an arrangement would likely lead to conflict if the child denies their parent’s request for a distribution from the Family or Marital Trust.

Chicago Estate Planning Attorneys at Anthony J. Madonia & Associates can answer all your estate planning questions. Contact us to schedule an initial consultation.