For Married Couples, Should You Develop a Joint or Individual Revocable Living Trust?

March 12, 2016

By:  Olivia R. Holcombe-Volke, Esq.olivia@elvilleassociates.com, 443-393-7696

When utilizing a Revocable Living Trust-based approach for the estate plan of a married couple, an important first step is deciding whether to develop a Joint Revocable Living Trust – one Trust covering both spouses – or whether to create two individual Revocable Living Trusts, one per spouse.  There is no blanket rule to apply to all couples or all estates, rendering a thorough discussion with your estate planning attorney necessary.  However, a general overview of some of the issues to consider is a good starting point.  In this month’s blog, I will touch on the type of couple for whom, and/or assets for which, a joint Trust might be appropriate.

As a starting point, are you a married couple, with no children from prior marriages, everything held jointly with each other, and a combined taxable estate of less than $3 million[i]?  A joint Trust may make the most sense for you and your spouse.

  • A joint Trust can be simpler to administer and enables joint control over assets.
  • A joint Trust can make the inheritance to the surviving spouse easier, requiring less administration than when a spouse with an individual Trust dies and leaves everything to the surviving spouse.
  • A joint Trust can allow for separate ownership of certain assets, if properly titled.

However, gift taxes may be incurred when a joint Trust is funded.  A joint Trust can also be problematic if Medicaid asset protection planning is ever necessary.  And, a joint Trust can be less effective in avoiding estate tax, or addressing remarriage concerns.

In next month’s blog, I will delve into the issues and particularities that might render individual Trusts the right plan for you and your spouse.

For more information, please call 443-393-7696 or complete the form below.

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[i] This figure is based upon the current Maryland estate tax exemption of $1.5 million per person, slated to increase annually until 2019, when it will match the federal estate tax exemption, slated to be $6 million per person.