When it comes to estate planning, married couples have an important decision to make: should they create a joint trust together or set up separate individual trusts? While both options aim to protect your assets, streamline the distribution of your estate, and avoid probate, the right choice depends on your unique situation—including your financial goals, family dynamics, and even where you live.
At Gentreo, www.gentreo.com, we believe that your estate plan should be as personal as your life story. That’s why we make it easy to understand your options and help you document your choices securely in your Gentreo Digital Vault. In this article, we’ll walk you through the differences between joint and separate trusts, the pros and cons of each, and how to decide what’s best for you and your spouse.
What Is a Trust?
Before diving into joint vs. separate trusts, let’s quickly recap what a trust is. A trust is a legal document that allows you to transfer your assets into a legal entity (the trust), which is then managed by a trustee for the benefit of your chosen beneficiaries. Trusts can help avoid probate, reduce estate taxes, and provide a roadmap for how you want your assets managed and distributed.
There are many kinds of trusts, but for married couples, the conversation often revolves around revocable living trusts, which can be modified during your lifetime.
What Is a Joint Trust?
A joint trust is a single trust created by two people—usually spouses or domestic partners—that combines their assets into one shared legal entity. Both spouses are typically co-trustees and co-grantors, meaning they manage and control the trust together while they are alive.
When one spouse passes away, the surviving spouse often continues to manage the trust. After both have passed, the assets are distributed according to the trust’s terms.
Pros of Joint Trusts
- Simplicity: One trust document, one set of rules. A joint trust can make planning and management easier, especially if most of your assets are jointly owned.
- Efficiency: It can simplify administration during your lifetime and after the first spouse dies.
- Cost-effective: Creating one joint trust is generally less expensive than drafting two separate ones.
- Great for unified goals: If you and your spouse are on the same page about your estate, a joint trust can streamline your wishes.
Cons of Joint Trusts
- Less flexibility: It may be harder to plan for individual goals or children from prior relationships.
- Privacy tradeoffs: Upon the first spouse’s death, the entire trust may become irrevocable, limiting the surviving spouse’s ability to make changes.
- Not ideal for blended families: If either spouse has children from a previous relationship, managing asset distribution can become complicated.
What Is a Separate Trust?
A separate trust means each spouse creates and manages their own revocable trust. Each person decides how to distribute their share of the estate, which can include jointly-owned or individually-held property (if retitled appropriately).
This option is especially common in blended families, high net-worth households, or in states with community property laws.
Pros of Separate Trusts
- Greater control: Each spouse can outline specific wishes for their assets, which is important for those with children from previous relationships.
- Privacy: Upon one spouse’s death, the surviving spouse doesn’t automatically gain control of the deceased spouse’s trust—potentially reducing disputes.
- Tax planning: Separate trusts can be structured to reduce estate taxes and protect generational wealth. You should consult with a tax professional for help on this.
- Asset protection: Helps preserve inheritance lines and avoid unintentional disinheritance.
Cons of Separate Trusts
- Complexity: Maintaining two trusts requires more time, planning, and administrative work.
- Higher upfront costs: Creating and funding two trusts can cost more initially.
- Coordination required: If assets are commingled, sorting them into separate trusts can be tricky.
Which Option Is Best for You?
There’s no one-size-fits-all answer. The right trust structure depends on your specific goals, financial situation, and family makeup. Here are a few scenarios to help guide your decision:
Many Consider a Joint Trust If:
- The person and their spouse have shared financial goals and mostly joint assets.
- Simplicity and efficiency are important.
- This is a first marriage and as a married couple have children together (or no children at all).
- Living in a common law property state.
Many Consider Separate Trusts If:
- A blended family is involved and there is a desire to protect inheritances for children from a previous relationship.
- Significant individual assets or business interests are involved.
- Living in a community property state (like California or Texas).
- There is a desire for more privacy or flexibility after one spouse dies.
Legal Considerations by State
Where you live matters. In community property states, assets acquired during marriage are typically owned jointly by both spouses. That can affect how trusts are structured and funded. In common law states, property ownership is determined by title—making separate trusts easier to manage.
Gentreo is built to help you comply with your state’s laws while offering flexibility and simplicity. As laws vary, it’s always wise to review your plan regularly or after major life changes.
How Gentreo Can Help
Whether you choose a joint or separate trust, Gentreo makes estate planning easier than ever. Our online platform allows you to:
- Create your Living Trust in minutes.
- Securely store your trust and related documents in the Gentreo Digital Vault.
- Share access with loved ones or trusted advisors so they’re ready when needed.
- Update your plan when life changes—no lawyer fees, no hassle. Note that you still must get your documents executed.
Plus, our Life Inflection Points tool helps you know when to review your plan—like getting married, having a baby, or buying a home—so you’re always in control.
Frequently Asked Questions
Can we start with a joint trust and switch to separate ones later?
Yes, but converting a joint trust into separate trusts can be complex. It’s usually easier to plan ahead and choose the structure that fits your long-term needs.
What happens if one spouse dies in a joint trust?
In most cases, the surviving spouse continues to manage the trust. Some parts may become irrevocable, depending on how the trust was written.
Is a trust the same as a will?
No. A trust helps avoid probate and offers greater privacy and control, while a will still goes through probate and is public record. Many people choose to have both.
Can Gentreo help with trusts for blended families?
Absolutely. Gentreo’s platform is designed to support all types of family structures, including blended families. You can name multiple beneficiaries, assign guardians, and even create pet trusts.
Final Thoughts
Choosing between a joint trust and separate trusts is an important step in your estate planning journey. It’s not just about assets—it’s about values, relationships, and the legacy you want to leave behind. With Gentreo, you can take control of your future, protect your loved ones, and plan on your terms.
Don’t wait until it’s too late; start your estate planning journey with Gentreo today. By doing so, you’ll not only protect your loved ones but also gain the peace of mind that comes with knowing your legacy is secure. Click HERE to join now.
This article is for informational purposes only and should not be considered legal advice. Consult with a qualified attorney or estate planning professional for personalized guidance.
