What Is the Best Type of Trust for Married Couples?
By: Barry E. Haimo, Esq.
November 25, 2021
If you’re beginning the process of planning ahead to protect your assets, you might be considering a revocable living trust as part of your estate planning. After all, you want to make sure that your heirs receive as much of your assets as possible and hopefully avoid probate court and unnecessary costs along the way.
But what if you are married?
A revocable living trust can be a strong tool in planning the best fit for you and your spouse. However, you will want to consider the benefits of separate and joint trusts and have the help of an experienced estate planning attorney to best meet your goals.
What Is a Revocable Living Trust?
It’s important to understand both the specifics of a revocable living trust and the advantages and disadvantages of trusts in general before you and your spouse begin estate planning. A revocable living trust is a document in which the terms and provisions can be altered at any time. This sets it apart from an irrevocable trust in which the terms and provisions are essentially fixed and can only be changed with a great deal of time and red tape.
A revocable trust can offer someone quite a bit of asset protection but also flexibility, as it can be changed or even revoked during a person’s lifetime. It also offers more privacy because it is far less likely to go through the courts and probate.
Trusts: Separate or Joint?
So, you’ve decided a revocable trust sounds like the right choice for you — but what about your spouse? Often a revocable living trust would be filed as a separate trust by each person in the marriage, but in some cases a joint trust is a better option.
If the couple is comfortable with the couple owning all assets jointly and the surviving spouse inheriting all the assets, a joint trust may be the way to go. Separate trusts may offer more protection, but joint trusts can be easier to establish and maintain.
In Examining Both Types of Trusts You Should Consider:
- Tax Implications of Each Type of Trust
- Asset Protection Goals
- Current Ownership of Assets
- Components of Trust During Your Lifetime
- Components of Trust After Your Death
Now Let’s look at the pros and cons of separate and joint revocable living trusts.
If you have assets that you inherited from a family member or previous marriages, a separate trust can be a good fit. Additionally, if you have a prenup or are in a rocky marriage, this type of trust offers you more individual protection and can assure your assets go to your selected beneficiaries. For example, children you have from a previous marriage.
Separate trusts can also offer more protection from both creditors and taxes. Each spouse’s trust may be changed or amended whenever necessary or desired. But a disadvantage of them is that they can be a more complicated and expensive process overall.
If you are in a very secure marriage and also feel comfortable with the surviving spouse inheriting all the assets, joint trusts offer a simpler process with additional advantages. Just like separate trusts, a joint trust offers flexibility during life.
A couple who decides on a joint trust will most likely be the joint co-trustees of their assets as well, and would have a great deal of flexibility and control over the trust while they are both alive.
However, if you have a history of creditor claims and debts, you should consider a joint trust carefully and what it could mean for your surviving spouse.
When You Select the Best Trust for Your Marriage
Both separate and joint trusts have their advantages and disadvantages, but a revocable living trust can be an excellent starting choice for you and your spouse.
Haimo Law can help guide you in considering your options and deciding which trust is right for you. Protect your family, assets and business, and gain the peace of mind of knowing you’re prepared and in control. Call Haimo Law to get started today at 954-228-3369.
Barry E. Haimo, Esq.
Strategic Planning With Purpose®
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