Trusts and Estates

Ca. Trs. & Estates Quarterly 2019, Volume 25, Issue 4

TIPS OF THE TRADE: PITFALLS OF SPLIT-INTEREST TRUSTS FOR BLENDED FAMILIES

By Jeremy J. Ofseyer, Esq.*

Estate planning clients with blended families often think they need a "split-interest" trust to provide benefits for a surviving spouse for life, with any remainder going to issue from a prior marriage. Although this reflects a natural wish, the administration of a split-interest trust is fraught with risks of conflict for the blended family.

This column outlines common split-interest trust structures and the reasons for them, examines the pitfalls they present in blended families, and suggests alternatives that can reduce family conflict. It suggests planning approaches to minimize the risks involved when drafting and administering split-interest trusts. It concludes with a separate discussion of split interests in a family residence.

I. COMMON SPLIT-INTEREST TRUSTS

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