Living Trusts for Married and Unmarried Couples

Most couples will want one shared living trust, but occasionally individual trusts make sense.

Both married and unmarried couples can create living trusts. They can each create their own individual trust 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. Each member of the couple acts as a co-grantor and co-trustee of the trust. However, each person may choose any beneficiary she desires for 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 grantor will remain in the trust. The trust then continues until the death of the second grantor.

On the other hand, there are several good reasons to create individual trusts. An individual trust may make sense if you and your spouse own most of your property separately. Individual trusts may also make sense for you if you do not want your spouse to have control over the property you contribute to the trust, or if you are recently married and want to keep your previously acquired property separate.

You should keep in mind that creating individual trusts can be an awkward task for jointly-owned assets. That requires that you and your spouse sign and record two new deeds that transfer your half-ownership of the property to the trust. The best bet is to form a separate joint living trust for your joint assets.

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