Joint Trust vs. Individual Trust

What Is the Difference Between a Joint Trust vs. Individual Trust

Estate planning is an important process for everyone, but it can be especially critical for married couples. There are a number of different ways a couple may structure their estate, and trusts can be valuable tools that will allow for the protection of assets and flexibility in managing financial issues. Multiple different types of trusts may be created, and one of the most important decisions a couple can make is whether to create a joint trust or individual trusts. Determining the best way to approach these matters is not always easy, but with the help of a qualified and experienced estate planning lawyer, a couple can take steps to protect themselves and plan for the future.

At Gateville Law Firm, we understand the importance of preparing for the future, and we work with families to determine the best options for managing financial concerns, providing for the needs of different family members, and ensuring that a person's wishes will be followed both during their life and after their death. We provide guidance to married couples who are looking to establish trusts and address other estate planning issues, and we can help them understand whether joint or individual trusts will be the best solution in their particular situations.

Understanding the Differences Between Joint and Individual Trusts

When creating a trust, a person or couple will place assets in the control of a trustee and provide instructions for distributing the assets to different beneficiaries. Trusts may be revocable or irrevocable. Many revocable trusts are also known as living trusts, and they will allow a person to maintain control of the assets in the trust and use these assets to provide for themselves, while also providing instructions for how remaining assets should be distributed to beneficiaries after their death.

A couple may choose to maintain joint trusts that include marital assets they co-own. Most of the time, these joint trusts will be revocable. In some situations, one or both spouses may create separate individual trusts, and these trusts may be revocable or irrevocable.

Benefits of Joint Trusts

A joint trust can provide a couple with the ability to easily manage their assets, and when a trust is revocable, either spouse can make changes to the terms of the trust. For couples who are happily married, who do not expect to get a divorce, and who can work together to make decisions about their marital assets, these trusts are often a beneficial option. After the death of one spouse, the other spouse will assume control of a joint trust, and marital estate tax deductions will apply. While joint trusts offer some asset protection benefits, the assets in a trust will be jointly owned by both spouses, so judgments against one spouse may place assets in the trust at risk.

Benefits of Separate Trusts

In some cases, each spouse may prefer to create an individual trust instead of or in addition to a joint trust. This may be a good option if either spouse owns separate assets, such as an inheritance they had received or a business they owned before getting married. A separate trust may allow a person to ensure that certain assets will be passed to beneficiaries other than their spouse after their death, such as children from a previous marriage. Separate trusts can also offer additional asset protection benefits, ensuring that one spouse's assets will not be placed at risk by the actions of the other spouse.

Contact Our Kendall County Trusts Attorney

During the estate planning process, a married couple will want to weigh their options and determine the best tools to use based on their unique situation. Gateville Law Firm can help couples understand the benefits and drawbacks of using joint or individual trusts, and we can ensure that a couple will be able to manage and protect their assets in a way that will meet their family's needs. To schedule a free consultation to discuss your estate planning concerns and goals, contact our office by calling 630-780-1034. We offer estate planning services at flat rates in 99 percent of the cases we handle.