One phone call that will always occur from our clients is after the first spouse dies and what the surviving spouse needs to be doing. When we speak with our clients for the first time and they state their primary concern is to avoid probate and make things simple for the family that they leave behind, a recommendation that we usually make is to establish a revocable living trust so that the surviving family members will not have to hire a law firm and go through the difficult and painful probate court process.
However, what happens after the first spouse dies? Usually, nothing happens! When we advise clients to establish a revocable living trust it is almost always because the clients want to avoid probate and make things simple for their families. One of the benefits of a revocable living trust is that when the first spouse dies, everything will remain in place for the surviving spouse. The surviving spouse will not have to do anything during her time of loss except to grieve the loss of their spouse. The surviving spouse will continue to maintain control of all the assets, financial accounts, retirement accounts, and real estate interests. Everything will remain simple for the surviving spouse, and nothing will need to be done to transfer any of the assets to the surviving spouse.
Although, what is important to remember, under most revocable trust documents, is that the trust will become irrevocable upon the death of the surviving spouse, usually referred to as co-settlor of the trust. Therefore, the successor trustee that you picked has no choice but to following the directions of the trust and distribute those assets according to the provisions of the revocable living trust after the death of both settlors of the trust. A trust does remain completely revocable during the life of the settlor, or in this case, the surviving spouse.
However, a question that always comes up is what happens if I get remarried and want to leave my assets to my second husband? Well, under most revocable trust agreements, the trust remains revocable during the life of either or both settlors. Therefore, after the first spouse dies, the surviving spouse still retains the power to revoke the trust affecting both the interest of the surviving spouse and the interest in property of the first spouse. It is not until the surviving spouse, or both settlors, die that the trust becomes irrevocable. Therefore, if the surviving spouse ended up getting remarried, the surviving spouse could amend the revocable living trust to include her new husband as the beneficiary of the revocable trust, or could even revoke the trust altogether and establish a new trust with her second husband as co-settlors of their new revocable living trust.