Every couple’s situation is unique. To reduce the possibility of a problem after your or your spouse’s death, your estate plan should be evaluated and, if necessary, recalibrated to make sure your assets are protected and your tax exposure minimized. You need to ensure that the transfer of the estate assets in the event of the death of your spouse is free of unnecessary delays that could result because of probate or trust issues.

The primary difference between a disclaimer trust and the classic “A-B” trust is what happens to the couple’s assets upon the passing of the first spouse. In a classic “A-B” model, half of the couple’s assets are frozen and placed in an irrevocable trust to be passed on to heirs and beneficiaries. The disclaimer trust enables the surviving spouse to have the opportunity to evaluate several factors including:

• Remaining life expectancy
• Cost of Living
• Healthcare Issues
• Taxation

Once a comprehensive financial assessment has been completed, the surviving spouse determines which portion of the assets to “disclaim” – placing them in the irrevocable portion of the trust. The amount of the “disclaimer” does not have to be half, it may be more or it could be substantially less. The disclaimer trust provides more flexibility for a surviving spouse.

In blended family situations this can create issues for children of previous marriages and inheritances. It is important to seek the counsel of an experienced and seasoned estate planning and tax attorney.