Question

Craig and Judy have just married. It is a second marriage for both of them and they both have kids from a prior marriage. Craig would like his portion of their account to go to his kids when he dies and Judy would like her portion to go to her kids when she dies. As new partners in marriage, while they are both alive they would both like to have full access to the account. What type of account(s) should they set up?

Answer 1

Craig and Judy should set up a trust, which allows them to have full access to their account while alive and ensures their respective portions are passed to their children upon their death.

Step-by-step explanation:

Craig and Judy, who are recently married, each want their portion of their joint assets to go to their respective children from previous marriages upon their passing, while maintaining full access for both partners during their lifetimes. The type of account suitable for their situation is a trust. A trust is an arrangement that allows for the management and distribution of assets without the need for probate court, and can be set up to handle complex family situations such as theirs. The trust can be structured so that each party's portion of the assets is clearly defined and directed to their children upon their death. While Craig and Judy are alive, they would both act as trustees, giving them both full access and control over the account. Upon the death of one of the partners, their portion can then be transferred to their children as per the trust's instructions. To ensure that their wishes are carried out correctly, it's advisable that they work with an estate planning attorney to set up the trust.