Creating a trust is one way of ensuring that your heirs are taken care of and that at least some of your assets do not go through probate. Trusts also have some tax benefits and give you some control over how your heirs use their inheritance. If you are married, you and your spouse could create a joint trust, or you could each create an individual trust. There are some benefits to both.
Why Create a Joint Trust?
Creating a trust together is often the easier of the two options, and it typically costs less, too, since you are only creating one trust. A single trust is easier to manage as well. You and your spouse have equal control over the trust, and if one of you dies before the other, the surviving spouse can typically assume full control, though you may also need to create a new trust at that point. As long as the two of you agree on how you should divide your assets and who your heirs are, though, a joint trust can be a great option.
Do Individual Trusts Have Benefits a Joint Trust Doesn’t?
Despite being easier to manage one joint trust, there are some reasons why you and your spouse may want to create individual trusts. Individual trusts allow you to determine where your personal assets go, while your spouse can do the same for their individual assets. Making separate trusts fully protects your assets, even if a creditor attempts to lay claim to some of your spouse’s. If you are concerned about managing two trusts, you can always name each other as co-trustees, giving you both control over each other’s trust.
Which Is Right for You?
Both options provides some estate tax benefits and ensure your heirs are taken care of after you pass. Neither individual trusts nor joint trusts are inherently better, either, so you should look at your needs and determine which option is better for you. For example, if you have children from a previous relationship, you may want to create individual trusts to ensure all of your children receive an inheritance.
In order to decide which estate planning option is right for you, you may need to consult with a legal expert. The team at Michael F. Kanzer & Associates can help you with all of your trust needs. Contact us today to schedule a free consultation.