In the world of estate planning, every situation is unique. Situations that involve second marriages and live-in partners can reveal competing considerations. Fortunately, using the law of trusts can often help us accommodate the competing concerns and fashion a comfortable result for all interested parties.

For instance, let us imagine the following scenario. Edgar and Kristin have each been married in the past, and now they want to live together. They have determined getting married is unduly burdensome and not necessary. 

Edgar has two children, Francine and Emily, from a prior marriage. Kristin has two children, Ellie and Tom, from a prior marriage.

Edgar owns the home and wants Kristin to be able to live in the house for her remaining single life, if she survives him. What should Edgar do to ensure this happens?

Edgar should create a trust agreement that accomplishes these objectives. He will deed the real estate to his trust. This will ensure the terms of his trust control the disposition of the real estate and that this asset will avoid probate. 

Edgar will want to pay careful attention to the conditions that could cause the beneficial interest in Kristin to cease, such as remarriage or carnal cohabitation. Also, Edgar might want to consider naming one of his children as co-trustee. The key thing is to carefully craft the language so as to be very clear about the rights and responsibilities created. 

Now, let us consider that Ellie has special needs that entitle her to government assistance. Kristin’s disposition will want to ensure that Ellie’s share may be held in trust for her benefit and perhaps that her brother Tom is the trustee. 

If done properly, these funds can be made available for the benefit of Ellie while at the same time not jeopardizing her government benefits. Without the law of trusts, we would not be able to accomplish the same result. 

Now, let us consider that Francine is a surgeon. For asset protection purposes, it would be strongly advised to consider leaving her share in trust so that these assets would not be exposed to lawsuits. Further, let us assume that Francine will never have children because she is infertile and will not adopt. In this case, it would be wise to spell out in Francine’s trust so that when Francine passes, the property will go to her sister, Emily. 

Alternatively, let us assume Francine is in a bad marriage. Her share shall be left to her “in trust” so she will not lose it in a divorce. This protects Emily’s future interest.

In sum, by the above example we can see trusts can be used to control the flow of assets over time and to preserve government entitlements and protect against legal claims. If used properly, trust law can prove a wonderful tool to manage competing concerns that naturally arise in the context of cases involving second marriages and live-in partners.

Mark F. Winn, J.D., Master of Laws (LL.M.) in estate planning, is a local asset protection, estate and elder law planning attorney.