Is There a Difference Between a Marital Trust and a Separate Trust?
Estate planning involves more than just deciding who gets what. It often includes carefully structured legal tools designed to manage property, reduce tax exposure, and protect assets for future generations. Two of the most commonly used trusts in estate plans for married individuals are marital trusts and separate trusts. While both serve important roles, the differences between them can have a serious impact on how an estate is distributed and whether disputes arise later.
At Trust Law Partners, we regularly speak with clients who don’t realize what kind of trust they’re involved with—or how those distinctions affect their rights. In many cases, confusion over trust types leads to litigation, especially when family dynamics are complicated by remarriages, disinherited children, or unclear instructions in the trust documents.
When What Exactly Is a Trust and Why Does It Matter?
A trust is a legal arrangement where one person, the trustee, is responsible for holding and managing assets for the benefit of someone else, the beneficiary. The person who creates the trust—the settlor or grantor—sets the terms that the trustee must follow. Unlike wills, which go through probate, trusts generally allow for private administration and often give the grantor greater control over how assets are handled and distributed.
Trusts can serve many purposes. People use them to avoid probate, keep financial matters private, plan for incapacity, manage distributions to minor children, shield assets from creditors, or minimize estate taxes. For married couples, trusts are often used to coordinate how shared and individual property is managed during their lives and after one spouse dies.
How Marital Trusts Work
A marital trust—sometimes called an “A Trust,” a “QTIP trust,” or simply a “spousal trust”—is a common component in estate plans for married couples. This type of trust is created to provide for the surviving spouse when one spouse passes away. The trust holds the deceased spouse’s portion of the estate but allows the surviving spouse to benefit from it during their lifetime, often through access to income and, in some cases, principal.
Importantly, the surviving spouse is usually the only beneficiary during their lifetime. When they die, the remaining assets in the trust are distributed to other beneficiaries, often children from the marriage or from a previous relationship. The structure of the trust may also limit how much the surviving spouse can withdraw or how the assets can be used, which helps preserve the value of the estate for the ultimate beneficiaries.
In addition to its protective features, a marital trust allows for tax deferral. Thanks to the unlimited marital deduction under federal estate tax law, assets passed into a marital trust are not taxed until the death of the second spouse. This can significantly reduce the estate’s tax burden and preserve more of the inheritance.
Despite these advantages, problems often arise when the surviving spouse, who is usually also acting as the trustee, begins using trust funds for their own benefit in ways that aren’t authorized. The original intent of the trust can be ignored or overridden, leaving the remainder beneficiaries with nothing. This kind of trustee misconduct can lead to lawsuits, especially if beneficiaries are denied accountings or see the trust’s value dwindle due to mismanagement.
The Purpose of a Separate Trust
In contrast to marital trusts, separate trusts are often used to manage assets that one spouse considers separate property. This includes property acquired before the marriage, as well as gifts or inheritances received during the marriage that were kept separate. In many cases, each spouse will have their own separate trust that is customized to reflect their own property, intentions, and chosen beneficiaries.
Separate trusts are especially common in second marriages or blended families where each spouse wants to preserve their assets for their own children. A person might establish a separate trust to leave their estate directly to their kids, without giving control to their spouse or stepchildren. In some cases, the trust provides limited support for the surviving spouse, while in others, the spouse may be excluded entirely.
Unlike marital trusts, separate trusts do not rely on the marital deduction for estate tax purposes. However, they allow the grantor more control over distributions, and they make it easier to keep certain assets shielded from commingling with community property.
Legal disputes often arise when the surviving spouse or stepfamily members challenge the terms of a separate trust. For example, a surviving spouse might believe certain assets should have been considered community property, not separate. Or children might find themselves locked out of their parent’s estate because a step-parent acting as trustee is withholding information or refusing to make distributions. These are the types of cases we frequently handle.
Why the Trust Type Matters in a Dispute
Knowing whether a trust is marital or separate is critical if you’re trying to understand your rights—or figure out whether the trustee is violating the trust’s terms. Many disputes begin when family members discover they’ve been excluded or are receiving far less than expected, only to realize too late that the documents were never updated or that the trustee is misusing their power.
For instance, it’s not uncommon for children from a first marriage to believe they’re entitled to a share of the estate, only to learn that their deceased parent left everything to a marital trust benefiting the new spouse. While this may have been intentional, in some cases it’s the result of unclear documents or undue influence.
Conflicts also emerge when a surviving spouse, acting as trustee of a marital trust, fails to provide beneficiaries with required accountings, delays distributions, or starts using trust assets for personal enrichment. Trustees are legally obligated to act in the best interests of the beneficiaries, not themselves, but enforcement requires action.
Separate trusts also generate litigation when one side claims certain assets were improperly labeled. If there is no clear record of how the property was acquired, and the trust was never updated to reflect community or separate interests, disputes over asset ownership are inevitable. In California, where community property law is well established, failing to clarify these issues in the estate plan can be especially costly.
Another flashpoint occurs when a trust is amended near the end of someone’s life. If one spouse changes a separate trust to disinherit their children shortly before passing, and this change benefits a new caregiver or partner, beneficiaries often suspect foul play. In those situations, a claim of undue influence or lack of capacity may justify contesting the trust in court.
Can One Trust Combine Both?
Some estate plans use an AB trust structure that includes both marital and separate trust elements. In this case, when one spouse dies, the trust is divided into two parts: the “A” trust, which qualifies for the marital deduction and benefits the surviving spouse, and the “B” trust, which is a bypass or credit shelter trust that holds the decedent’s share of the community or separate property.
This type of structure was more common before the federal estate tax exemption was significantly increased, but it is still used in high-net-worth estates and blended families. The presence of an AB trust adds complexity, and family members should take care to understand how each part operates.
What You Can Do If You Suspect a Problem
If you are a beneficiary and feel like something is off with the way a trust is being handled, you are not powerless. You have the right to request a copy of the trust and to demand an accounting of assets. If the trustee fails to respond, or if you find evidence of mismanagement or self-dealing, you can file a petition in probate court.
At Trust Law Partners, we help clients understand whether a trust is being administered properly, explain their rights, and file legal action when needed to protect their inheritance. We often deal with cases where a trustee is withholding distributions, failing to communicate, or clearly misusing their authority. Whether it’s a question of removing a trustee, recovering stolen assets, or proving that a trust amendment was obtained through undue influence, our team knows how to hold fiduciaries accountable.
How Trust Law Partners Can Help
Trust litigation is complex, and disputes over trust administration can quickly escalate into lengthy legal battles. At Trust Law Partners, LLP, we represent beneficiaries who are facing challenges in obtaining trust accountings, disputing improper trustee actions, or seeking court approval for necessary trust modifications.
If you are involved in a trust dispute and need legal guidance, we can help you petition the court for approval, enforce your rights as a beneficiary, or remove a trustee who is not acting in your best interest. Our team specializes in trust litigation and is dedicated to ensuring that trustees follow the law and fulfill their obligations.
For a confidential consultation, contact Trust Law Partners, LLP at 833-878-7852 today.
