Before we explain the intricacies of living trusts as they apply to married couples, we should examine the value of these trusts in general.
You may assume that a last will is the best option when you are planning your estate. Many people are under the impression that trusts are only useful for those who are very wealthy.
This is not entirely true. There are trusts that are used to satisfy the objectives of the wealthy, but there are other types of trusts that are useful for people of relatively ordinary means. One of these is the revocable living trust.
Incapacity Planning & Probate Avoidance
When you have a revocable living trust, you can account for the possibility of incapacity late in your life. You could name a successor or disability trustee in the trust agreement. If you were to become incapacitated, the disability trustee would be empowered to administer the trust.
There is also the matter of probate avoidance. Probate can be succinctly defined as the legal process of estate administration. If you use a will to direct the transfer of your personally held property, the will must be admitted to probate. The estate must be probated before the heirs receive their inheritances.
This is a time-consuming process, and it can also be expensive.
You can avoid probate and the drawbacks that go along with it if you use a revocable living trust to facilitate future asset transfers.
Now that we have provided some background, we can look at the question that serves as the topic of this post. The answer will depend on the way that the trust was constructed.
If it is a shared revocable living trust, the spouses would typically act as co-trustees and co-beneficiaries while they are both alive and well. When one spouse dies, the surviving spouse is often designated as the sole remaining beneficiary and is generally named as the surviving trustee, then upon the death of the surviving spouse, property passes to the named heirs.
A shared revocable living trust may be a good option if you and your spouse own most of your valuable property together. Your spouse would control the shared property if you do in fact predecease your spouse.
Revocable living trusts can also be set up for divorce protection, so that upon the death of the first spouse, the surviving spouse acts with a co-trustee that oversees the deceased spouse’s part of the community property and the deceased spouse’s separate property. This will help to assure that the surviving spouse is taken care of during his or her lifetime, and if he or she remarries it will assure that the deceased spouse’s share will remain intact for his or her heirs instead of the heirs of the new spouse.
When it comes to personally held property that has been conveyed into the trust, each party could name beneficiaries to inherit these assets. You may choose to have personal property pass to to heirs upon your death, or you may designate the personal property to pass upon the death of the surviving spouse.
It is also possible for each party to create his or her own living trust. This may be a good idea if there is very little shared property.
Free Report on Living Trusts
We have prepared an in-depth report that will answer most questions that you may have about revocable living trusts. This report is being offered free of charge, and you can download it through this website. To obtain access, click the following link: Free Living Trust Report.
We also invite you to attend one of our Free Living Trust Seminars. To register for an upcoming seminar, follow this link: Free Living Trust Seminars.