There are many things that need to be considered when choosing between a joint or separate trust for married couples. Although one option may seem more suitable, factors such as the state in which the couple resides, the total of the couple’s marital estate, and the couple’s relationship itself can play a role in which option is right for you both. We share the main differences here to help you with your decision.
Why Should You Choose a Joint Trust?
A joint trust usually has cheaper start-up costs, it’s easier to manage, and it views the marital estate as a singular unit. Joint trusts are a good option for first marriages where both partners have the same beneficiaries, the same distribution patterns, and the same trustee. This is an option that couples who wish to keep their marital estate unified should consider.
Why Should You Choose a Separate Trust?
Separate trusts are great for asset protection, management flexibility, and cost savings after the death of the first spouse. In particular, they are a good option for remarriages (who may differ in their beneficiary designations) or couples who own individual property prior to the marriage. If there is a couple who expects to receive an individual inheritance that they would like to keep separate, this also makes the separate trust a better option. It is also a good idea to get a separate trust for common law marriages and couples who have already signed a prenup agreement.
Related Article: What Are the Benefits of Having a Trust?
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Marcia L. Campbell, CPA is committed to helping each client plan for the personal and financial decisions that need to be made for the future. Marcia’s team has a genuine interest in your well-being and a well-established list of services to help guide you through this process.
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