Must a spouse be a trust beneficiary?

My mom would like to setup a trust with me as the trustee; herself, myself, and my 3 kids as the beneficiaries. She's currently married. Can she do that without having her spouse as one of the benificiaries?

No trust. Unless you have offshore accounts, are a director of a corporation,or buy a million dollars in coverage,, keep it simple.

Simply having your spouse as beneficiary, means in the event of your death, he would have the benefits . tax free, in 2 weeks or less.

I belive you are speaking of a revocable living trust. If not, it is aallll screwed up. She can use a trust to bypass a spouse only up to her specific State limitations. Most states default to a certain amount being left to spouse.

The solution is to provide the legal minimum (usually most effectively done with a life insurance policy for pennies on the dollar) naming the spouse as full beneficiary.

For example if the state minimum for spouse is 30% of assets, and the estate to be left is $1 million, simply purchase a life policy for an amount that equals 30% (including policy proceeds), in this case $390,000 (30% of $1,390,000: original $1Mil estate plus 30% policy) and make the spouse the sole beneficairy of the policy only (assets in the trust will then be guaranteed to be transferred as planned). This ensures that the trust cannot be contested successfully using the spousal allowance provisions of the state.

Most married couples choose the surviving spouse as each other's IRA beneficiaries. Both income and estate tax laws favor this designation. When including others, such as children, in the estate, assets other than your IRA(s) should be used to fund bequests to non-spouse beneficiaries, and the IRA benefits should be paid to the spouse. Of course, naming the spouse as outright IRA beneficiary is not always feasible. Some circumstances make it more appropriate to name a trust for the spouse's benefit (typically, a QTIP trust) or, if the IRA benefits are the only assets available, to fund a credit shelter trust in full. This article highlights the tax advantages of designating the spouse as IRA beneficiary.

Spousal Exceptions to Minimum Distribution Rules. The purpose of the minimum distributions rules (MDRs) is to require an IRA owner to begin to withdraw the funds at some point, called the "required beginning date for distributions" or "required beginning date," and set at April 1 of the year following the year in which the IRA owner reaches age 70½. Withdrawing less than the minimum annual amount can subject the IRA owner (or his beneficiary) to a 50% penalty. Whether or not an IRA owner designates a beneficiary as of his required beginning date and whether or not the name beneficiary qualifies as a "designated beneficiary" determine not only how the benefits pass at the IRA owner's death but also what he must withdraw before death. If an IRA owner has named a beneficiary as of his required beginning date, the identity of the beneficiary fixes the maximum payout period. The IRA owner can change the beneficiary after the required beginning date, but this change can't extend the maximum payout period.