Joint Revocable Living Trusts

Many couples use a joint Revocable Living Trust to avoid probate and to handle both their co-owned property and their separately held property. Here, both partners establish the joint Revocable Living Trust and as such, both act as co-grantors and co-trustees of the joint Revocable Living Trust. As co-grantors, each partner can nominate beneficiaries for their individual or separate property and for their portion of joint property. In addition, each partner can unilaterally call for the return of their assets to them and/or revoke the joint Revocable Living Trust at any time. When the joint Revocable Living Trust is revoked, the assets return to the parties that placed them in to the trust. Each partner retains full ownership and control of all their separate property as well as their share of the jointly owned property.

 

When one of the partners dies, the joint Revocable Living Trust automatically splits into two separate trusts – we’ll call them the ‘first trust’ and the ‘second trust’. The deceased partner’s property and share of the joint property is automatically transferred in to the first trust. The terms of the first trust immediately become irrevocable which means the surviving partner cannot amend them in any way. Thereafter, the surviving partner in his/her capacity as successor trustee distributes the property in the first trust in accordance with the deceased partner’s wishes as set out in the joint Revocable Living Trust Agreement. In many cases, the deceased partner will leave his or her assets to the surviving partner’s trust – the second trust. 

 

All of the remaining trust assts are transferred to the second trust, which continues to exist as a stand-alone trust – similar to an individual trust. This trust is revocable by the surviving partner in the same way as an individual trust. When the surviving partner dies, the trust assets will be distributed in accordance with the terms of the trust in the usual way.

 

For more information on Revocable Living Trusts, read some of the other Revocable Living Trust articles on this website.



 

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Living Trust

Make Your Own Living Trust And Avoid Probate

 

This book will guide you step-by-step through the process of creating your very own living trust, transferring assets to your living trust and subsequently managing those assets. All required forms are included.


Updated Edition Published December 2010

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Living Trust Article What Assets Should be Transferred to a Living Trust

 

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