How to Stiff Your Kids (Unintentionally)
Jack and Jill were in a second marriage. Each has 2 children from a previous marriage. They don’t have any joint children.
Trusts are not a panacea. They take thought and forward thinking. Joint trusts are typical in community property states such as California. Many joint trusts provide for an equal distribution of assets even when there are children from different marriages. When one spouse dies, many joint trusts divide up into revocable and irrevocable trusts.
Suppose Mary & Joe have a living trust. Joe dies. Mary’s property goes into a revocable trust and she can do whatever she wants. Joe’s property goes into Joe’s irrevocable trust which says that his property will be divided equally among his and Mary’s children.
Then Mary decides that she is going to change her revocable trust to leave it all to her kids. The result is that Mary’s kids will get all of Mary’s property and ½ of Joe’s property; while Joe’s kids get ½ of Joe’s property and none of Mary’s property.