Monday, May 26, 2014
A husband and wife’s attempt to create three revocable trusts upon one of their deaths did not go as planned. After the wife died in 1998 the husband failed to segregate the funds into the three separate trusts, but made withdrawals from the assets. The trouble started when the husband died and proof of the creation of the three trusts could not be found. The result was that all withdrawals were considered as from the Marital Trust and included in his gross estate. The lesson to be learned is how extremely important it is to separate assets and properly fund trusts.
See Albert W. Gortz et al., Husband's Failure to Properly Fund Trusts After Wife's Death Caused Gross Inclusion of the Entire Balance of Wife's Revocable Trust in His Gross Estate, National Law Review, May 16, 2014.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.