Can a Husband Be a Trustee for His Wife's Irrevocable Trust?

By Christine Funk, J.D.

Can a Husband Be a Trustee for His Wife's Irrevocable Trust?

By Christine Funk, J.D.

A husband or wife can be given power to manage their spouse's irrevocable trust, but this scenario is not always the ideal solution. This type of estate planning cannot be modified or terminated without the express permission of its beneficiary. Once someone places their assets under this kind of management, they essentially give up their ownership rights to both the assets and their ability to modify the terms of their management. This is very different from a revocable living trust, where a person retains control of the assets and their ability to modify the terms.

Woman holding a pair of glasses to her chin as she reads paperwork

Terms Associated with Trusts

The person whose assets fund the trust is the grantor. In this example, the wife, the person establishing the irrevocable trust, is the grantor.

The beneficiary is the person or entity who receives the benefit of the estate. The benefit may include money, real estate, or other personal property such as jewelry, antiques, or art.

The trustee is the person charged with managing the assets in the estate and adhering to the trust's terms. For example, the documentation may provide detailed instructions about providing for the grandchildren's education expenses, piano lessons, educational trips, and attendance at a designated summer camp. On the other hand, it may simply indicate the funds in the estate should go toward "the benefit of the beneficiaries." Regardless of the level of detail, a trustee has a fiduciary duty to handle the assets with integrity and in an honest manner, acting in the best interests of the heirs.

Appointing a Spouse as a Trustee

There is nothing inherently wrong with designating a husband as the person in charge of his spouse's irrevocable trust. In fact, choosing a spouse for this role has some advantages. For example, this often the most likely person to have a clear understanding of the grantor's vision about how they would want their property handled. This can offer peace of mind.

However, this level of trust and understanding is not present in every marriage and should not be presumed. Additionally, a husband may have a condition that makes him a poor choice. If, for example, the husband is ill, has a chemical dependency problem, or has another issue that could result in poor judgment or an inability to perform his fiduciary duties, another person may be a better choice.

Changing Trustees

Careful thought should go into executing the terms of an irrevocable trust. One feature that many consider an absolute must is including a mechanism that allows the grantor to remove and replace a designated trustee. Of course, this provision only lasts as long as that person is alive to make that decision.

A grantor may consider naming some alternate trustees within the text of the irrevocable trust. Once the grantor dies, if the beneficiary wants to change the trustee, they must petition the probate court. They must establish that the current trustee is unfit in some manner. However, if they are successful in doing so, the court typically approves the alternate named in the document, unless doing so is not in the best interests of the beneficiary.

If you are considering establishing a trust, think about whether a revocable or irrevocable form is right for you. While it may seem obvious to give your husband control over your assets when you die, make sure that you can rely on him to carry out the complicated duties involved in managing and distributing an estate.

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