Listen to Dana Whiting Law’s managing partners, Matt Dana and Trevor Whiting, discuss Spousal Gift Trusts and how they might be beneficial to you….(read more)

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Podcast Episode 7 – Spousal Gift Trusts: What You Need to Know

Welcome to episode 7 of our podcast series, where we will be discussing spousal gift trusts. Planning for your spouse’s future is important, and one way to do this is with a spousal gift trust. In this episode, we’ll explore what a spousal gift trust is, how it works, and the benefits it can offer.

What is a spousal gift trust?

A spousal gift trust is a legal agreement between a married couple where one spouse gifts assets to a trust for the benefit of the other spouse. The trust is managed by a trustee, and the gifted assets are held in the trust for the benefit of the recipient spouse.

How does a spousal gift trust work?

In a spousal gift trust, the donor spouse (also known as the settlor) gifts assets to the trust for the benefit of the recipient spouse. The recipient spouse can receive income generated by the assets held in the trust, as well as principal distributions if necessary. The trust can be structured to last for the lifetime of the recipient spouse or for a specified period of time.

The trustee of the trust manages the trust assets and is responsible for making distributions to the beneficiary spouse. The trustee can be a professional trustee, a family member, or both. The settlor can also serve as trustee.

What are the benefits of a spousal gift trust?

A spousal gift trust offers several benefits, including:

1. Estate tax planning: Spousal gift trust can be a valuable tool for estate planning for wealthy couples. By transferring assets to a spousal gift trust, the donor spouse effectively removes those assets from their estate for estate tax purposes, potentially saving a significant amount of estate tax.

2. Protecting assets: A spousal gift trust can protect assets from creditors, lawsuits, and other liabilities that the recipient spouse may incur.

3. Providing for the recipient spouse: A spousal gift trust can provide for the recipient spouse’s needs, even after the donor spouse’s death.

4. Control over assets: The donor spouse can retain control over the trust assets during their lifetime and can dictate how the trust assets are distributed after their death.

Conclusion

A spousal gift trust can be a useful tool for estate planning and providing for the future of your spouse. It provides several benefits, including estate tax planning, asset protection, and control over assets. If you’re considering a spousal gift trust, it’s essential to seek the advice of legal and tax professionals to ensure it’s set up correctly and aligns with your individual goals and needs.