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.