South Carolina: Trust vs Will
Hi, trying to guide my sister and Bro in law (sis/BIL). The principal asset is the family home. Held in joint tenants with right of survivorship (JTWROS) so technically a will is not even required to pass to the survivor. After death of both sis/BIL the property is to be sold and split evenly across 3 children.
Now obviously, a will or trust is required to ensure the equitable split. A trust would avoid probate time and $ of course.
Here’s the complicating facts: 1) the property is still mortgaged and most importantly 2) both parties don’t want to risk a surviving spouse to be able to marry and then the property become property of the successive spouse.
Under JTWROS the property would pass to the survivor, who could remarry and 1) do nothing so the property is 100% his/hers and their will would dictate distribution; or and this is key to avoid; 2) retitle it as JTWROS with new spouse. Then the three intended beneficiaries could be totally screwed.
Even with a trust where both spouses are trustees initially, and after death of first spouse, the second spouse becomes sole trustee… the surviving spouse could change the trust documents to favor a subsequent spouse.
The only true safeguard i can see is to set up a trust today, with a) third party trustee (such as me), and b) the trust execute Lifetime Estate rights to both spouses. Then neither spouse can change the trust, and distribution rights are locked in (assuming I as trustee don’t change it, which I would not and Sis/BIL trust me not to do so. The key problem under this arrangement is that I as trustee would be obligated to pay mortgage, taxes, insurance, upkeep on the property if the surviving spouse failed to do so…and legally it’s my obligation, not his/hers. End of day, I want their present wishes protected and I don’t want to be left holding a financial liability as trustee.
I hope there is a more straightforward approach than I am imagining. Sometimes I overthink and over-complicate things trying to avoid every conceivable possibility.
Thoughts and suggestions are welcome. I know I need to seek counsel but trying to get a grasp on a solution before running up legal fees for Sis/BIL.