Married and unmarried couples can create living trusts, and each can create individual
trusts and/or a joint, shared living trust. Married couples should also factor in
whether their state is a community property or separate property state.
For most married couples, a basic shared living trust makes the most sense. Both
people act as co-grantors and co-trustees of the trust. However, each person may
choose any beneficiary for his or her share of commonly owned property and for individually
owned property in the trust. Both persons will have control over all of the property
in the trust. Either person may revoke the trust at any time. If that happens, the
ownership of the property returns to where it was before the trust was created.
When one of the co-grantors (spouses) dies, the property originally
contributed by that spouse will be distributed. Any property distributed to the
surviving spouse will remain in the trust. The trust then continues until the death
of the second grantor.
Benefits of Individual Living Trusts
On the other hand, there are several good reasons to create individual trusts.
Individual trusts may make sense if you and your spouse own most of your property
separately. Individual trusts may also make sense if you do not want your spouse
to have control over the property you contribute to the trust. If you are recently
married and want to keep your previously acquired property separate, individual
trusts could also accomplish that.
Keep in mind that creating individual trusts can be an awkward task
for jointly-owned assets. You and your spouse will have to sign and record two new
deeds that transfer your half-ownership of the property to the trust. Forming a
separate joint living trust for joint assets is one easy solution.
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