Marital trusts are an indispensable tool in estate planning, especially for married couples who want to secure financial stability for their surviving spouse while safeguarding assets for future generations. These trusts are particularly relevant in Rhode Island, where state and federal laws offer specific benefits. 

The Law Offices of Howe & Garside, Ltd, with over 40 years of combined experience, provides comprehensive legal services in family law and estate planning, including the establishment and management of marital trusts. Their team of family law attorneys is committed to delivering top-notch legal counsel and representation, meaning that every client’s estate planning needs are met with precision and care.

Basics of Marital Trusts

A marital trust, also known as a marital deduction trust, is a legal arrangement that allows assets to be transferred from one spouse to another, typically upon the death of the first spouse. The primary function of a marital trust is to provide financial support for the surviving spouse during their lifetime while also protecting the remaining assets to be passed on to other beneficiaries, such as children or other relatives, after the surviving spouse's death.

In Rhode Island, a marital trust can defer federal estate taxes until the death of the surviving spouse. This tax deferral helps preserve the estate's value for the surviving spouse and future generations, making marital trusts a strategic option for many families who want to protect their wealth and facilitate a smooth transition of assets. The estate planning attorneys at The Law Offices of Howe & Garside, Ltd are well-versed in the intricacies of Rhode Island law and can guide clients through the process of creating a marital trust that meets their specific needs and goals.

Types of Marital Trusts

Marital trusts come in various forms, each tailored to meet specific estate planning goals. The Law Offices of Howe & Garside, Ltd offers guidance in choosing the most appropriate type of trust based on the client's unique circumstances. Understanding the differences between these trusts is essential for making informed decisions that will benefit both the surviving spouse and future generations.

• Qualified Terminable Interest Property Trust: Otherwise known as QTIP, this trust allows the grantor to provide income to the surviving spouse for their lifetime. After the spouse's death, the remaining assets are passed on to final beneficiaries, such as children or other designated heirs. This type of trust is particularly beneficial for individuals who wish to retain control over the ultimate distribution of assets after the surviving spouse's death, making certain that the estate is distributed according to their wishes.

• General Power of Appointment Trust: This kind of trust gives the surviving spouse more control over the trust's assets. The spouse can access both the income and principal of the trust and has the authority to decide how the remaining assets will be distributed upon their death. This type of trust provides flexibility, allowing the surviving spouse to manage the assets as needed during their lifetime, which can be particularly important in cases where the financial needs of the spouse may change over time.

• Estate Trust: Estate trusts are also an option. These trusts allow the surviving spouse to access income generated by the trust throughout their life. However, unlike other marital trusts, the remaining assets in an Estate Trust become part of the surviving spouse's estate and are distributed according to their will. This option can be ideal for couples who want the surviving spouse to have full control over their estate and the freedom to make decisions that best suit their circumstances as they evolve.

Benefits of Marital Trusts

Marital trusts provide several critical benefits that make them an attractive choice for married couples in Rhode Island. These benefits extend beyond mere financial considerations, offering peace of mind and security for both the grantor and the surviving spouse.

One significant advantage is the tax benefit. Marital trusts allow for the deferral of state and federal estate taxes until the death of the surviving spouse. This deferral helps preserve the estate's value, meaning more assets are available for future generations. The estate planning attorneys at The Law Offices of Howe & Garside, Ltd are experienced in structuring these trusts in a way that maximizes tax benefits while adhering to all relevant legal requirements.

Another benefit is asset protection. By placing assets in a marital trust, they're shielded from creditors, which helps keep these assets intact for the surviving spouse and the beneficiaries. This protection is crucial for families who want to safeguard their wealth against unforeseen financial challenges, providing a layer of security that can be relied upon in difficult times.

Additionally, marital trusts offer control over asset distribution. The grantor can specify how the trust's assets will be distributed after the surviving spouse's death. This level of control makes certain that the estate is handled according to the grantor's wishes, offering peace of mind that their legacy will be preserved as intended. The ability to dictate the terms of asset distribution can prevent disputes among heirs and maintain family harmony after the passing of both spouses.

Finally, marital trusts provide financial security for the surviving spouse. The trust offers a steady source of income, which can be vital for the spouse's financial stability during their lifetime. This security allows the surviving spouse to maintain their standard of living without worrying about financial constraints, knowing that their needs will be met for the rest of their life. The estate planning attorneys at The Law Offices of Howe & Garside, Ltd take great care in crafting trusts that offer this level of security, reflecting the values and desires of their clients.

How We Can Assist With Marital Trusts

Establishing and managing a marital trust involves several important steps, each requiring careful consideration and legal guidance. The attorneys at The Law Offices of Howe & Garside, Ltd have the experience and knowledge needed to guide clients through each phase of the process, achieving their estate planning goals effectively and efficiently.

• Consultation and Trust Planning: The initial consultation is a crucial part of the process. During this meeting, the attorney discusses the client's estate planning objectives, financial situation, and any specific concerns. This allows the attorney to recommend the most suitable type of marital trust, tailored to the client's individual needs. The estate planning attorneys at The Law Offices of Howe & Garside, Ltd take the time to understand each client's unique situation, offering personalized advice that reflects their goals.

• Drafting the Trust Agreement: After determining the appropriate trust structure, the next step is drafting the trust agreement. This document outlines the terms of the trust, including asset management, income distribution to the surviving spouse, and how the remaining assets will be distributed to the final beneficiaries. The Law Offices of Howe & Garside, Ltd drafts trust agreements that comply with Rhode Island law and accurately reflect the client's intentions. The attorneys address every detail, providing a solid foundation for the trust's administration.

• Funding and Administering the Trust: Once the trust agreement is finalized, the trust must be funded by transferring assets, such as real estate, investments, or bank accounts, into the trust. The estate planning attorneys at The Law Offices of Howe & Garside, Ltd assist with the necessary legal paperwork to make sure the trust is properly funded. Administering the trust involves managing its assets according to the terms outlined in the agreement, including distributing income to the surviving spouse and eventually distributing the remaining assets to the final beneficiaries.

• Reviewing and Updating the Trust: Over time, changes in life circumstances or legal developments may require a review and update of the trust agreement. The estate planning attorneys at The Law Offices of Howe & Garside, Ltd offer regular reviews to verify that the trust continues to meet the client's needs and remains aligned with current laws. By keeping the trust up-to-date, the firm helps clients adapt to changes and maintain the effectiveness of their estate plan.

If You’d Like to Arrange a Trust, Call Us

Marital trusts are a vital part of estate planning, offering financial security for the surviving spouse and protection of family assets. The Law Offices of Howe & Garside, Ltd, with decades of experience in family law and estate planning, provides the expertise needed to establish and manage marital trusts effectively.