Q: Is a second trust legal if the first trust has a contract stating no changes can be made to the first trust?
A revocable trust is made by husband and wife.
A contract is signed by both stating no changes can be made to the trust if one dies.
Husband dies.
Wife creates a second revocable trust which changes the beneficiaries from 4 kids (3 of husbands) to the 1 child of the mother.
Which trust is legally binding?
A:
They both could be legally binding. It depends on what the first trust says happens to the funds once one spouse dies (in this case, the husband died first). That trust could say "once the first spouse dies, everything goes to the surviving trust". If that's the case, then the surviving spouse is free to create a new trust for themselves since the money received from the deceased spouse is now their own. The first trust could also say "upon the death of the first spouse, assets will be held in trust for the surviving spouse". In that case, those funds remain subject to the terms of the first trust, with future distribution determined by the clauses that speak to what happens once both spouses dies.
Bottom line: the wife can make a legally binding trust affecting her property (anything not subjected to the terms of another trust).
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