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Spousal Trust: A Comprehensive Guide for Residents

Setting up a spousal trust can be an essential part of estate planning to protect and provide for your spouse after you pass away. In this article, we'll take an in-depth look at what a spousal trust is, its benefits, and how an experienced attorney from Heritage Law Office can help you create one. Contact us online or at 414-253-8500 to schedule a free consultation today.

What is a Spousal Trust and Why is it Important?

Definition of a Spousal Trust

A spousal trust is a legal arrangement created to benefit the surviving spouse after one partner passes away. The trust holds and manages the assets of the deceased partner, providing income and support to the surviving spouse. This type of trust is designed to ensure the financial well-being of the surviving spouse while preserving the assets for eventual distribution to other beneficiaries, such as children or grandchildren.

Benefits of a Spousal Trust

  1. Asset protection: A spousal trust can protect assets from creditors and potential lawsuits. By placing the assets in trust, they are no longer part of the surviving spouse's estate and are generally shielded from claims.
  2. Tax benefits: Spousal trusts can offer tax advantages, such as deferring estate taxes until the surviving spouse's death, potentially reducing the overall tax burden on the estate.
  3. Control over asset distribution: The trust creator can specify the terms of the trust, determining how assets are to be used and distributed, ensuring their wishes are followed.
  4. Protecting assets for future generations: A spousal trust can help preserve assets for children or grandchildren, preventing the surviving spouse from depleting the estate.

How to Set Up a Spousal Trust

Seek Legal Guidance

It is essential to consult with a knowledgeable attorney to help you navigate the complexities of setting up a spousal trust. An experienced attorney can advise on the specific laws and regulations governing spousal trusts and tailor the trust to meet your unique needs.

Draft the Trust Agreement

The attorney will draft a trust agreement, outlining the terms and conditions of the spousal trust. This document will include details on the trust's purpose, beneficiaries, and instructions for the trustee to manage and distribute the assets.

Choose a Trustee

Selecting a trustworthy and competent trustee is critical for the proper management of the spousal trust. The trustee can be an individual, such as a family member or friend, or a professional, like a bank or trust company. Consider the trustee's experience and expertise when making your decision.

Fund the Trust

After the trust agreement is complete, the trust must be funded with the assets intended for the surviving spouse. These assets can include real estate, investments, cash, or personal property. The attorney can assist with the proper transfer of assets to the trust.

Spousal Trusts and Medicaid Planning

Spousal trusts can also play a role in Medicaid planning for long-term care. By placing assets in a spousal trust, the trust creator may help the surviving spouse qualify for Medicaid assistance while preserving the estate for other beneficiaries. Consult with an attorney experienced in Medicaid planning to ensure compliance with state regulations and to develop a comprehensive plan tailored to your needs.

Contact a Spousal Trust Attorney

To learn more about spousal trusts and how they can benefit you and your family, contact Heritage Law Office. Our experienced attorneys can help you create a spousal trust tailored to your specific needs and goals. Contact us online or at 414-253-8500 to schedule a free consultation today.

Contact Us Today

For a comprehensive plan that will meet your needs or the needs of a loved one, contact us today. Located in Downtown Milwaukee, we proudly provide legal advice to those in Milwaukee County and surrounding communities.

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757 N. Broadway, Suite 300
Milwaukee, WI 53202
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