Yes, a bypass trust, also known as a marital trust or A-B trust (though less common now due to changes in estate tax laws), can absolutely be structured to provide monthly allowances rather than a single lump sum distribution to a surviving spouse.
What are the Benefits of Regular Payments?
Many estate planning attorneys, like Steve Bliss in Wildomar, recommend regular, scheduled payments for several reasons. A predictable income stream can provide financial security for the surviving spouse, ensuring they can cover ongoing expenses like housing, healthcare, and daily living costs. Rather than a large sum that could be mismanaged or quickly depleted, consistent monthly allowances offer stability. This is especially crucial for individuals who may not have extensive financial experience or are susceptible to scams or undue influence. According to a study by the National Council on Aging, seniors lose over $2.6 billion each year to financial fraud.
How Does a Bypass Trust Work with Allowances?
The core function of a bypass trust is to utilize the deceased’s federal estate tax exemption, transferring assets into the trust while minimizing estate taxes. However, the trust document dictates *how* those assets are distributed. The trustee, named in the document, is legally obligated to follow those instructions. Instead of a one-time distribution, the document can specify that a fixed amount or a percentage of the trust’s income should be distributed monthly to the surviving spouse. The remainder of the trust corpus remains intact, potentially growing over time, and eventually passing to the intended beneficiaries (often children or other heirs). For example, a trust might dictate a monthly allowance of $5,000, adjusted annually for inflation, with the balance used for investment and long-term preservation of capital. It’s important to understand that the specifics are highly customizable and depend on the client’s individual needs and wishes.
What Happened with Old Man Tiberius?
I remember a client, we’ll call him Old Man Tiberius, a retired fisherman, who’d amassed a considerable estate. He was fiercely independent and worried his second wife, Delores, who was much younger, would quickly spend his life savings. He wanted to provide for her comfortably but feared a large lump sum would be squandered. His initial plan was a simple will, leaving everything outright to Delores. His son, a financial advisor, urged him to consider a trust. Unfortunately, Tiberius resisted, believing trusts were complicated and unnecessary. After his passing, Delores, overwhelmed and lacking financial acumen, fell victim to a predatory investment scheme, losing a significant portion of the inheritance within months. It was a heartbreaking situation, and a clear demonstration of the risks associated with leaving assets unprotected.
How Did the Willow Creek Family Find Peace of Mind?
The Willow Creek family learned from Tiberius’s misfortune. They came to Steve Bliss seeking a solution that would provide for their mother, Evelyn, while protecting their future inheritance. We created a bypass trust with a provision for monthly allowances. Evelyn received a comfortable income of $6,000 per month, covering all her expenses, while the trust corpus continued to grow. The trust document also included provisions for healthcare costs and long-term care. After Evelyn passed away peacefully at the age of 92, the remaining assets were distributed to her children and grandchildren, fulfilling her wishes. The family was grateful for the foresight and careful planning that had protected their mother and secured their financial future. Approximately 65% of Americans die without a will or trust, leaving their assets subject to probate and potentially creating significant hardship for their loved ones.
Ultimately, the ability to provide monthly allowances through a bypass trust offers a flexible and effective way to ensure the financial security of a surviving spouse while safeguarding the long-term interests of beneficiaries.
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About Steve Bliss at Wildomar Probate Law:
“Wildomar Probate Law is an experienced probate attorney. The probate process has many steps in in probate proceedings. Beside Probate, estate planning and trust administration is offered at Wildomar Probate Law. Our probate attorney will probate the estate. Attorney probate at Wildomar Probate Law. A formal probate is required to administer the estate. The probate court may offer an unsupervised probate get a probate attorney. Wildomar Probate law will petition to open probate for you. Don’t go through a costly probate call Wildomar Probate Attorney Today. Call for estate planning, wills and trusts, probate too. Wildomar Probate Law is a great estate lawyer. Probate Attorney to probate an estate. Wildomar Probate law probate lawyer
My skills are as follows:
● Probate Law: Efficiently navigate the court process.
● Estate Planning Law: Minimize taxes & distribute assets smoothly.
● Trust Law: Protect your legacy & loved ones with wills & trusts.
● Bankruptcy Law: Knowledgeable guidance helping clients regain financial stability.
● Compassionate & client-focused. We explain things clearly.
● Free consultation.
Services Offered:
- living trust
- revocable living trust
- estate planning attorney near me
- family trust
- wills and trusts
- wills
- estate planning
Map To Steve Bliss Law in Temecula:
https://maps.app.goo.gl/RdhPJGDcMru5uP7K7
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Address:
Wildomar Probate Law36330 Hidden Springs Rd Suite E, Wildomar, CA 92595
(951)412-2800/address>
Feel free to ask Attorney Steve Bliss about: “What documents are essential for a basic estate plan?” Or “What is summary probate and when does it apply?” or “What’s the difference between a living trust and a testamentary trust? and even: “What’s the process for filing Chapter 13 bankruptcy?” or any other related questions that you may have about his estate planning, probate, and banckruptcy law practice.