Revocable Living Trust for Married Couple
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FAQ
At the time of your death, the assets in your family trust are protected by the exemption, and the assets in your marital trust are protected by the marital deduction. No estate taxes are due.
Joint trusts are easier to fund and maintain.In a joint trust, after the death of the first spouse, the surviving spouse has complete control of the assets. When separate trusts are used, the deceased spouses' trust becomes irrevocable and the surviving spouse has limited control over assets.
A marital trust allows the couple's heirs to avoid probate and take less of a hit from estate taxes by taking full advantage of the unlimited marital deductiona provision that enables spouses to pass assets to each other without tax consequences.
Typically, when a married couple utilizes a Revocable Living Trust based estate plan, each spouse creates and funds his or her own separate Revocable Living Trust. This results in two trusts. However, in the right circumstances, a married couple may be better served by creating a single Joint Trust.
The joint revocable living trust should be revocable and subject to amendment by either spouse or both spouses acting together during the joint lifetimes of the spouses. If the trust is revoked, its assets will be distributed to the spouses as they direct.Dangers of joint revocable 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.
When one spouse dies, the joint trust will continue to operate for the benefit of the surviving spouse as a Survivor's Trust. Any specific gifts of tangible property from the first spouse to beneficiaries (other than the surviving spouse) will be given to those people.
Separate trusts provide more flexibility in the event of a death in the marriage. Since the trust property is already divided, separate trusts preserve the surviving spouse's ability to amend or revoke assets held within their own trust, while ensuring that the deceased spouse's trust cannot be amended after death.