How To Ensure Your Children Inherit Your Property after Your Spouse Dies
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Jeffrey Johnson
Insurance Lawyer
Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...
UPDATED: Jul 14, 2023
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UPDATED: Jul 14, 2023
It’s all about you. We want to help you make the right legal decisions.
We strive to help you make confident insurance and legal decisions. Finding trusted and reliable insurance quotes and legal advice should be easy. This doesn’t influence our content. Our opinions are our own.
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Proper estate planning is at the core of making sure that your property is transferred to the right family members at your death. In the case of order of inheritance, everything depends upon the state’s laws where you live and the type of estate planning you engage in to provide for both your spouse and children. Two of the best options for making sure your children inherit your property after your spouse dies include contractual wills and living trusts like the A/B trust.
Making Sure Your Children Inherit with a Contractual Will
One option for using estate planning to ensure your children inherit your property after your spouse dies is a contractual will. A contractual will is a mutual will drafted by both spouses
that states the two of you agree not to change your will once the other spouse dies. Typically a contractual will is either two mirrored wills for the two spouses or is a single distribution will. While this will guarantee that your children inherit anything that is left once your spouse dies, it cannot guarantee that anything will be left. After two probate proceedings and estate taxes, as well as bills to creditors and medical debt, an entire estate is sometimes completely spent by the time your spouse dies. Furthermore, wills become public information once they go through probate. This means that any creditor or salesman can see exactly how much is in your estate.
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Living Trust Option: The A/B Trust
A better and more substantial solution is an A/B trust. An A/B trust is a form of estate planning called a living trust, which is done before you die and sets up a series of trusts for after you die. There are two different phases that an A/B trust goes through. The first phase is called the A trust, and the second phase is called the B trust.
A Trust
The A trust is a mirror revocable trust that assigns you and your spouse as the initial trustees. This means that while the property is not in your immediate possession, you still have enough control to ensure a comfortable life and growth of your assets. This trust is privately created, ensuring that no one will ever find out the value of the trust assets. The structure of this trust will remain in place until either you or your spouse dies.
B Trust
Upon the death of either you or your spouse, the B trust takes over. The B trust is an irrevocable living trust designed to care for the remaining spouse during their life. The trust is run by someone other than the surviving spouse, ensuring tax protection. Best of all, everything from the A trust is immediately poured over into the B trust, ensuring no probate proceedings.
When your spouse dies, the beneficiary provisions in the B trust take over, ensuring that your children continue to receive payments from the trust. If you would prefer that the children inherit outright, you can leave instructions in the trust document that the B trust be dissolved with equal distribution to your children upon your spouse’s death.
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Consult an Estate Planning Attorney
Remember that estate planning can be complex. Regardless of the method you choose, the drafting of the documents and filing of the forms must be done in a very specific way. To ensure your wishes are understood and followed, contact an estate planning attorney and set up a consultation.
Case Studies: Ensuring Your Children Inherit Your Property After Your Spouse Dies
Case Study 1: The Power of a Contractual Will
John and Mary were a married couple with two children. They wanted to ensure that their children would inherit their property after either of them passed away. They consulted an estate planning attorney who recommended a contractual will. John and Mary decided to create mirrored wills that stated their agreement not to change the wills once the other spouse dies.
Unfortunately, John passed away unexpectedly, and Mary honored their contractual will by not changing the terms. As a result, their children inherited the remaining assets without any complications, providing them with financial security for their future.
Case Study 2: The Benefits of an A/B Trust
Robert and Sarah had substantial assets and wanted to ensure that their children would receive their inheritance while also providing for the surviving spouse. They opted for an A/B trust as part of their estate planning strategy. When Robert passed away, his assets automatically poured over into the B trust, designed to care for Sarah during her lifetime.
The trust was administered by a trusted individual, ensuring tax protection. Sarah continued to receive financial support from the trust while their children received regular payments as beneficiaries. This allowed Sarah to maintain her quality of life, while also securing their children’s future.
Case Study 3: Maximizing Inheritance With Proper Estate Planning
David and Lisa wanted to ensure that their children would inherit their property after the death of either spouse. They consulted an estate planning attorney who recommended a combination of strategies, including a contractual will and an A/B trust. This comprehensive approach helped maximize their children’s inheritance while providing for the surviving spouse.
When David passed away, his assets poured over into the B trust, providing financial security for Lisa. The trust also contained provisions that, upon Lisa’s death, the remaining assets would be distributed equally among their children. This allowed David and Lisa to secure their children’s future while taking care of each other during their lifetimes.
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Jeffrey Johnson
Insurance Lawyer
Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...
Editorial Guidelines: We are a free online resource for anyone interested in learning more about legal topics and insurance. Our goal is to be an objective, third-party resource for everything legal and insurance related. We update our site regularly, and all content is reviewed by experts.