Revocability and the Remarried Spouse

Sidney and Sally are 40-somethings. Married 20 years, they have two teen-age children. They own a house, two cars, a rental condo, and financial accounts. Their combined net worth is two million dollars, all earned during their marriage.
They intend to form and fund a revocable living trust. They say, if one of them dies, all of their assets should benefit the survivor of them and their children. If they both die, whatever assets remain should pass to the children, equally, with postponement of possession until each child is 25. Their first Successor Trustee will be Sidney’s brother. Their second Successor Trustee will be Sally’s sister.
I explain that, as all the assets appear to be community property, each party has the right to direct the disposition of his/her half of these assets.
I ask, if either of them dies, should the survivor be able to amend the decedent’s share, or only the survivor’s share? For instance, regarding the decedent’s share, may the survivor (1) appoint different Successor Trustees? (2) change the percentages left to the children or (3) leave assets to other beneficiaries?
That last example is the kicker, which raises the underlying question: What if either dies or the other remarries or enters a long-term relationship? (Observation: widows/widowers who have had good marriages tend to be open to another marriage, later on, after mourning is done.) Would Sidney want Sally to use any of Sidney’s share to support her new husband? Would Sally want Sidney to give the family china and silver (lovingly selected by Sally) to Sidney’s new squeeze?
Often, the loving couple decides to hedge their bets with sub-trusts: After the first death, the Survivor’s Trust will include the survivor’s share of assets. The Residuary Trust will include the decedent’s share. Typically, the survivor can spend his/her share, and gets the income and certain principal withdrawals from the Residuary Trust. If the survivor spends all of his/her share (on the survivor and the children) he/she may access the Residuary Trust, up to the whole thereof. At the death of the survivor, whatever is left in the Residuary Trust will pass as the first decedent had directed, such as, to the children.
All of this requires careful consideration by the parties, and careful drafting by an attorney experienced in estate planning.
Jerry Kessler practices law in Santa Clarita. He may be reached at 661-255-1001.