Considerations of Joint vs. Individual Trusts in Marriage

Learn the pros and cons of creating a joint trust rather than separate trusts for each spouse.

One of the basic questions estate planners must face when advising married couples on the structure of their estate plan is whether to create separate trusts for each spouse, or a joint trust created by both spouses. This is particularly true in community property states. However, joint trusts have grown in popularity in recent years, both among estate planning professionals and their clients. Given this trend, even estate planning attorneys in common law (sometimes called "separate property") jurisdictions must be prepared to discuss the potential benefits and risks associated with joint trusts when advising clients. This requires familiarity with the basic elements of joint trusts and the possible reasons for preferring a joint trust or separate trusts in any given situation. This topic will discuss the reasons joint trusts have become popular, the possible benefits of creating joint trusts for married clients, and the circumstances in which a joint trust may or may not be appropriate. You will learn the basic structure of a joint revocable trust, and will gain a greater understanding of the elements that should be included for purposes of asset protection, ease of administration, preservation or creation of community property status, as well as estate tax planning. You will also learn the potential tax, family law, and practical issues to consider when deciding whether to recommend a joint trust or separate trusts. This information will focus on issues relating to joint revocable trusts, but will also touch on issues relating to joint irrevocable trusts. Estate planners in community property and common law jurisdictions will benefit from this presentation.