Both Married and Unmarried Couples Can Create Living Trusts

Both Married and Unmarried Couples Can Create Living Trusts

Both married and unmarried couples can create living trusts. Married couples should consider whether they live in a community property or a separate property state before deciding what type of trust to create.

For many married couples, a basic joint living trust will meet their needs. Each person can act as both a grantor and a trustee of the trust. In addition, each person can choose a beneficiary for his or her share of commonly-owned trust property, and for his or her individually owned trust property. Both spouses will have control over all of the trust property, and either person may revoke the trust at any time. If the trust is revoked, property will be owned in the same way it was before the trust was created.

When one grantor dies, the property contributed by that grantor will be distributed to his or her beneficiaries, either directly or in trust. For example, if a husband dies first and gives his property to his wife under a joint trust, the property is hers to do with as she chooses. When the wife dies, if any of her husband's property still exists, it will be included in her estate for estate tax purposes. Any property contributed by the surviving spouse remains in the trust. The trust continues until the surviving spouse dies or the trust is revoked.

Benefits of Individual Living Trusts

There are good reasons to create individual trusts. You may find individual trusts useful if you and your spouse own most of your property separately, or if you do not want your spouse to control the property you contribute. If you are recently married and want to keep your previously acquired property separate, you can use individual trusts to do this.

Keep in mind that jointly-owned assets don't fit neatly into individual trusts. With co-owned real estate, for example, you and your spouse would need to sign and record two new deeds to transfer half-ownership interests into separate trusts. Forming a separate joint living trust for joint assets may solve this problem.

  • Introduction to Living Trusts
    A living trust lets you control who receives your assets after you die. However, this isn't the only reason to create a living trust. A living trust can offer many benefits to its creator. For example, a living trust can help your beneficiaries avoid the probate-related expenses and delay normally...
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  • Definition of a Living Trust
    A trust is an arrangement in which one or more people manage or take care of property for someone else's benefit. A living trust is a trust that is created during your lifetime. In other words, while you are still alive, you transfer title to your property from your name to that of the trustee of...
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  • Comparing Living Trusts and Last Wills
    Although living trusts and last wills are both used to distribute property to beneficiaries, there are some important differences between them. One of the key benefits of a living trust is that it limits the probate court's involvement in property distribution. Unlike a last will, which can be tied...
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  • Probate, and Reasons to Avoid It
    Probate is a court-supervised process used to validate your will and distribute your property. The process takes anywhere from six months to over two years to complete, and may require that lawyers or other professionals be hired. Even if you die without a will, if your estate's value exceeds a...
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  • Transferring Property into a Living Trust
    You must transfer property into a living trust to take advantage of the trust's benefits. The person who transfers property into a trust is called the "grantor." In general, you should put your most valuable property in the trust. This may include your:
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  • Real Estate Placed in a Living Trust
    If you are the sole owner of a piece of property, you can include that property in your living trust. You will need to change the property's title to reflect the ownership change.
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