A living trust is created by a grantor when he transfers property to a trustee to hold and manage for the benefit of specific beneficiaries. When a person creates a living trust, it is normally a part of a broader estate plan. Oftentimes, the creator names himself as beneficiary and initial trustee, but when he passes away, the trust then conveys his property to other designated beneficiaries instead of by will. If the creator of the trust remarries, the terms of the trust generally do not change automatically. However, many times the trust can be altered to include a new spouse as a beneficiary to the trust.
A trust agreement defines the terms of the trust. It will describe who the trustee is, who the beneficiaries are, how the trust property is to be managed, and when the trust property may be distributed to the beneficiaries. If a living trust merely names the grantor’s “wife,” “husband,” or “spouse” as a beneficiary, the new spouse may be able to step into the trust as a beneficiary without needing to change the trust’s terms. However, if the trust was created during the first marriage, the old spouse may contest that claim and argue she specifically was the beneficiary, not the current spouse.
Read More: Definition of Trust Agreement
A revocable trust allows the grantor to change the terms any time he wants. As a result, when he gets remarried, he can add his spouse as a beneficiary. This can typically be done in one of two ways. The first is for the creator of the trust to draft a document saying his spouse is now a beneficiary of the living trust. This document must generally be signed in the presence of witnesses or it must be notarized. The second option is for the creator of the trust to revoke the original trust and create a new one with his new spouse as a beneficiary.
An irrevocable trust cannot be modified on the creator's whim, but it can be changed. If the trust’s creator and all of its beneficiaries agree, the creator’s new spouse can be added as a beneficiary. To document the change, the creator of the trust should draft an amendment designating the new spouse as a beneficiary. The beneficiaries and creator should all sign the amendment in the presence of either witnesses or a notary public.
If a living trust does not include a new spouse, she may be able to claim a share of the trust’s assets when the trust creator dies. Under the principle of “elective share,” a surviving spouse may claim a percentage of the deceased’s estate regardless of whether it was granted in a will. In some states, the surviving spouse may be able to claim a percentage of any living trust created by the decedent spouse.