In this article, you will discover:
A joint living trust, as opposed to an individual trust, is created jointly with another individual. The most common example would be a married couple setting up a trust together that reflects their joint wishes as opposed to individual wishes.
Usually, a couple will create a trust together because they have aligned interests. They want the disposition of their estate to be a joint decision. When that is the case, a joint living trust is almost always the best option.
There are other options to create reciprocal trusts or separate trusts if the couple is coming to the marriage with significant separate property assets they would like to keep separate.
A joint living trust allows a couple to make joint decisions as to how their community property assets or jointly owned assets will be distributed upon their respective deaths. There are different options. You can have certain assets pass when one spouse predeceases the other, or you could have everything only pass after both spouses are deceased.
The advantages of a joint trust are that if something happens to one spouse, the survivor is typically going to be in a much better position because (1) they avoid probate, and (2) they are set up for success in the event of their passing.
If you have assets in excess of the probate limit and/or children, setting up a trust is always going to be a first option.
The main disadvantage to setting up a joint living trust is if two individuals each owned significant separate property assets prior to the date of marriage. If there are any issues with wanting to keep those assets separate, an estate planning attorney can help the couple explore other options. However, if the couple is married, everything is community property, so there are very few disadvantages to setting up a joint trust.
Another instance requiring care is if you have a “his, hers, and theirs” situation, as with blended families. This situation is becoming more and more common. There may be concerns about children who are separate from the relationship and the need to ensure they get a portion of the inheritance.
There are other options you can pursue in terms of structure. One option is irrevocability or the inability of a surviving spouse to appoint or otherwise assign the deceased spouse’s interest. A joint trust can still be done, but it needs to be done carefully and with the full consent of both individuals. If it’s done improperly, it can create long-lasting issues for the family and beyond.
If the trustee is somebody other than yourself, make sure it’s someone you trust to uphold their duties and perform according to the terms of the trust. Don’t choose a stranger or someone you don’t know well. Family and friends can work if you trust them, but it can also be risky. Most people choose a family member, typically their children, assuming they’re old enough to handle the role.
Some clients select a neutral or professional trustee, such as a corporate fiduciary or a private professional fiduciary, to manage the trust for them or act as the successor trustee. They do this if there are situations where they believe there are going to be conflicts between the beneficiaries upon their passing.
Attorney Taylor Preston is an experienced lawyer based in Irvine, CA, who has helped clients like you navigate the intricacies of estate planning law. With years of estate planning and trust litigation experience, he is prepared to assist you with setting up a trust so that you can protect your family’s financial legacy.
Still have questions? Ready to get started? Contact Preston Law Group, P.C. today to schedule an initial consultation.
Conflict can arise if there are multiple children and you select one of them to take over. The other children may feel there’s a power imbalance, which can create issues. Conversely, if you have multiple co-trustees who disagree on how to make decisions regarding the trust, that can also lead to conflict. If that happens, a court may need to intervene.
The bottom line: Pick somebody you’re comfortable with, you trust, and who has your best interest at heart.
The role of an estate planning attorney is to educate and guide. They’ll go over the expectations, goals, interests, assets and family structure with you. This is always done on an individual, case-by-case basis. There’s no one-size-fits-all with estate planning.
My role as an estate planning attorney, especially when creating a joint living trust, is to make sure both trustors, the ones creating this joint trust, are on the same page. That means you need to understand completely:
If you have questions, I always want to make sure you are well-educated about the process: pros, cons, benefits and disadvantages. Education and communication are paramount when establishing a living trust, especially a joint living trust. If one party doesn’t agree with the terms, I don’t recommend establishing a trust under those circumstances. You need joint approval and joint understanding when setting up a joint trust.
There is a lot of information about trusts online that may or may not be accurate. You may also hear things from friends or family that may or may not be true. For those reasons, it’s always best to have those questions answered by a licensed estate planning attorney.
When you’re dealing with a blended family, there are control issues. If one spouse passes, they may not trust the surviving spouse to give that deceased spouse’s children their share of the assets. If there are business interests, real properties, complex financial interests, or assets both in and outside of the United States, the complexity goes up another level. If there are so many assets that it puts you beyond the federal estate tax exemption, then the situation turns into a tax planning situation as well.
Some examples of typical set-up issues include:
If you have any questions about these issues, don’t rely on a Google search. Your priority should always be contacting a licensed estate planning attorney for advice with whom you can sit down and discuss your situation. All our estate plans are bespoke or tailored to the individuals and their particular situation, assets, and family structure.
For more information on setting up joint living trusts in California, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (949) 993-0639 today.
Attorney Taylor Preston is an experienced lawyer based in Irvine, CA, who has helped clients like you navigate the intricacies of estate planning law. With years of estate planning and trust litigation experience, he is prepared to assist you with setting up a trust so that you can protect your family’s financial legacy.
Still have questions? Ready to get started? Contact Preston Law Group, P.C. today to schedule an initial consultation.
