The Disposition at First Death tab determines how the surviving spouse or partner is provided for at the first death.
This tab appears in:
Married Will-based plans
Married Revocable Trust–based plans (Joint and Separate)
Unmarried Committed Couple plans
Noncitizen spouse planning versions
Although available options vary by package, the purpose is consistent:
Determine whether assets pass outright or into one or more trusts at the first death.
If trusts are created, define the amount of assets pass to the trusts (i.e., the "funding formula")
The terms of any trust created (distribution standards, remainder beneficiaries, powers of appointment) are selected on later tabs.
How the Structure of the Plan Affects First-Death Funding
How assets are funded at the first death depends on the structure of the plan.
Joint Revocable Trust (Married)
A single trust exists during lifetime. At the first death, the trust divides internally into the "Decedent's Share" and the "Survivor's Share." The Survivor's Share remains revocable and passes to the Survivor's Trust. One or more sub-trusts according to the selection made on this tab will be funded from the Decedent's Share, while anything passing "outright" to the surviving spouse passes to the "Survivor's Trust."
Separate Revocable Trusts (Married)
Each spouse has an independent trust. At the first death, only the deceased spouse’s trust becomes irrevocable and funds the selected sub-trusts. The surviving spouse’s separate revocable trust remains revocable.
Will-Based Plans
At the first death, the Will creates and funds testamentary trusts pursuant to the selected structure.
Unmarried Committed Couple Plans
If the client is benefitting their partner at the first death, the structure functions similarly to married couple planning, with language in the documents recognizing that marital deduction-based formulas operate only if the parties are legally married at death.
Noncitizen Spouse Versions
If the surviving spouse is not a U.S. citizen, there are fewer formula choices, and all resulting trusts that are created include compliance with Qualified Domestic Trust (QDOT) rules and QTIP rules where applicable. If you are drafting for a noncitizen surviving spouse, see this article.
Funding Options:
Give All Assets to Survivor
Selecting this option means that, at the first death, everything passes directly to the surviving spouse. No automatic sub-trust is created.
How this operates depends on the plan structure:
In a joint trust plan, the Decedent’s Share is distributed to the Survivor’s Share, which is then administered as a revocable Survivor's Trust.
In a separate trust plan, the deceased spouse’s trust distributes to the surviving spouse (or to the survivor’s separate trust).
In a will-based plan, assets pass outright through probate.
This approach keeps the structure simple and places full ownership and control with the surviving spouse.
Give All Assets Outright, With Optional Disclaimer Trust
All assets initially pass to the surviving spouse, and the surviving spouse may disclaim some or all of the inheritance within nine months of the date of the decedent's death. If a disclaimer is made, the disclaimed portion passes into a Disclaimer Trust.
How this operates depends on the plan structure:
In a joint trust plan, the spouse may disclaim any portion of the Decedent’s Share.
In a separate trust plan, the deceased spouse’s trust distributes unless disclaimed.
In a will-based plan, disclaimed assets fund a testamentary Disclaimer Trust.
If created, the Disclaimer Trust’s specific terms are selected on subsequent tabs.
Give All Assets to Family Trust
Under this option, no assets pass outright at the first death. All assets are directed into a Family Trust.
How this operates depends on the plan structure:
In a joint trust plan, the Family Trust is funded from the Decedent’s Share.
In a separate trust plan, the deceased spouse’s trust funds the Family Trust.
In a will-based plan, a testamentary Family Trust is created.
Create Pecuniary Credit Trust With Remainder Outright
A fixed dollar amount that is equal to the portion of the decedent’s estate that can pass free of both federal and Washington estate tax is distributed to a Credit Trust. The remaining balance passes outright or to the Survivor’s Share.
Currently, this means the Credit Trust is funded with the Washington estate tax exemption amount of $3.076 million, because the Washington exemption is lower than the federal exemption and therefore controls the tax-free amount.
How this operates depends on the plan structure:
In a joint trust plan, the Decedent’s Share is divided between the Credit Trust and the Survivor’s Share.
In a separate trust plan or will-based plan, the Credit Trust is funded and the balance passes to the survivor.
The specific terms of the Credit Trust — including distribution standards, remainder beneficiaries, and any powers of appointment — are selected on later tabs in the interview.
Create Pecuniary Credit Trust With Remainder to QTIP Marital Trust
Selecting this option means that, at the first death, a fixed dollar amount equal to the portion of the decedent’s estate that can pass free of both federal and Washington estate tax is distributed to a Credit Trust. The remaining balance passes to a QTIP Marital Trust rather than outright to the surviving spouse.
Currently, this means the Credit Trust is funded with the Washington estate tax exemption amount of $3.076 million, because the Washington exemption is lower than the federal exemption and therefore controls the tax-free amount. The remaining assets are allocated to the QTIP Marital Trust.
How this operates depends on the plan structure:
- In a joint trust plan, the Decedent’s Share is divided between the Credit Trust and the QTIP Marital Trust.
- In a separate trust plan or will-based plan, the deceased spouse’s trust (or estate) allocates first to the Credit Trust and then funds the QTIP Marital Trust with the balance.
The specific terms of both the Credit Trust and the QTIP Marital Trust — including distribution standards, remainder beneficiaries, and any powers of appointment — are selected on later tabs in the interview.
Create Pecuniary Marital Trust With Remainder to Credit Trust
Selecting this option reverses the order of allocation. A fixed dollar amount equal to the marital deduction needed so that the balance of the decedent’s estate can pass free of both federal and Washington estate tax is distributed to a Marital Trust. The remaining balance passes to a Credit Trust.
In this structure, the Marital Trust is funded first with the defined Marital Amount. The balance of the estate — up to the amount that can pass free of federal and Washington estate tax (currently $3.076 million) is then distributed to the Credit Trust.
How this operates depends on the plan structure:
- In a joint trust plan, the Decedent’s Share is divided first to the Marital Trust and then to the Credit Trust.
- In a separate trust plan or will-based plan, the deceased spouse’s trust (or estate) allocates to the Marital Trust pursuant to the defined formula and funds the Credit Trust with the remaining balance.
The specific terms of both the Marital Trust and the Credit Trust are selected on later tabs in the interview.
Give Pecuniary Marital Amount Outright With Remainder to Credit Trust
Selecting this option means that a fixed dollar amount equal to the marital deduction needed so that the balance of the decedent’s estate can pass free of both federal and Washington estate tax passes directly to the surviving spouse (or to the Survivor’s Share in a joint trust plan). The remaining balance passes to a Credit Trust.
- In a joint trust plan, the Marital Amount remains in or is allocated to the Survivor’s Share, and the balance of the Decedent’s Share funds the Credit Trust.
- In a separate trust plan or will-based plan, the Marital Amount distributes to the surviving spouse, and the remaining assets fund the Credit Trust.
The specific terms of the Credit Trust are selected on later tabs in the interview.
Create GST Exempt Credit Trust With Remainder Passing to Separate QTIP Trusts
Selecting this option means that three amounts are calculated. An amount equal to the portion of the decedent’s estate that can pass free of Washington estate tax is distributed to a Credit Trust. An additional amount equal to the decedent’s available federal GST exemption (net of the Credit Trust funding) is distributed to a Marital Trust intended to qualify for the marital deduction. Any remaining balance passes to a separate Residuary Trust, typically also structured to qualify for the marital deduction.
How this operates depends on the plan structure:
- In a joint trust plan, the Decedent’s Share is divided among these three trusts pursuant to the selected formula.
- In a separate trust plan or will-based plan, the deceased spouse’s trust (or estate) allocates assets among the three trusts according to the formula.
The specific terms of the Credit Trust, Marital Trust, and Residuary Trust are selected on later tabs in the drafting process.
Marital Property Agreement Reference
This tab also allows the drafter to indicate whether an existing marital property agreement should be referenced in the document.
Selecting “Yes” permits acknowledgment of:
Community property agreements
Prenuptial or postnuptial agreements
Property characterization agreements
This selection does not alter the funding formula but clarifies the ownership framework underlying the distribution.
Pecuniary Credit Funding vs. Pecuniary Marital Funding
When a plan includes both a Credit Trust and a marital share (either to a Marital Trust or outright to the surviving spouse), you must select the funding methodology. The system provides two pecuniary approaches: Pecuniary Credit Funding and Pecuniary Marital Funding.
Under either approach:
One share is funded with a fixed dollar (pecuniary) amount.
The balance of the estate passes under the residuary formula.
Two structural consequences follow from using a pecuniary formula:
If the pecuniary amount is satisfied in kind with appreciated assets, funding may trigger income tax at the estate level.
Post-death appreciation between date of death and funding accrues to the residuary share, not to the share receiving the fixed pecuniary amount.
Pecuniary Credit Funding
An amount equal to the Washington estate tax exemption is allocated to the Credit Trust as a fixed pecuniary amount. The balance of the estate (including post-death appreciation) passes to the Marital Trust or outright to the surviving spouse, depending on the selected structure.
Under this approach, interim appreciation generally benefits the marital share.
Pecuniary Marital Funding
An amount equal to the marital deduction needed so that the balance of the estate can pass free of federal and Washington estate tax is allocated as a fixed pecuniary amount — either to a Marital Trust or outright to the surviving spouse. The remaining balance passes to the Credit Trust.
Under this approach, interim appreciation generally benefits the credit share.