A Spousal Trust Provision is a specific clause included in a trust document that allows a trustor to provide for their spouse in a particular manner after their death. This provision typically ensures that the spouse receives income or benefits from the trust during their lifetime, while also establishing how the trust’s assets will be distributed after the spouse’s death.
The Spousal Trust Provision can be structured in various ways, depending on the desires of the trustor and the financial situation of the couple. For example, a trust may allow the surviving spouse to receive all income generated by the trust assets while preserving the principal for the couple’s children or other beneficiaries after the spouse passes away. This is often referred to as a QTIP (Qualified Terminable Interest Property) trust, which provides the surviving spouse with income while ensuring that the ultimate distribution of the trust’s assets goes to the beneficiaries designated by the trustor.
In Houston or surrounding areas in Texas, incorporating a Spousal Trust Provision can also have tax implications and benefits, particularly in terms of estate and gift taxes. Properly structured, it can provide financial security for the surviving spouse while also addressing the trustor’s wishes for the distribution of their estate. It is advisable for individuals to consult with an estate planning attorney to tailor the Spousal Trust Provision to their specific needs and circumstances.
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