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Married couples may feel obligated to be together for various activities or combine many aspects of their lives. Whether that’s putting their name on a piece of property or attending events together — typically married couples expect to be together.
When it comes to finances and the future of an individual’s assets after they pass, a person who is married may not always consider joining their spouse.
What is a Single vs. Joint Trust?
A trust is a legal documentation of transferring assets to a loved one by designating a third party to manage and distribute assets after your passing. A single trust is exactly what it sounds like — a trust established by one individual. A joint trust, on the other hand, is a trust established by two individuals who are married. In a joint trust, specific instructions can be laid out after the passing of one or both individuals.
Before making a final decision, individuals should consider the following when choosing a single or joint trust.
Pros of a Single Trust
- Better protection from potential creditors: if one spouse passes away and their trust is irrevocable, it could be more difficult for creditors to access it.
- Assets going to heirs rather than the surviving spouse: if one of the spouses has children or grandchildren that are not biologically related to their current spouse, then upon their passing, that first spouse may prefer their assets go to their children or grandchildren rather than their current spouse.
Pros of a Joint Trust
- Maintenance: it is typically easier for couples to maintain and fund a joint trust over their lifetime. When making financial decisions, couples will not need to investigate each other’s separate trusts and determine who should have certain assets in their trust.
- Asset Control: upon the death of the first spouse, the surviving spouse has immediate complete control of the assets in the trust. If the couple were to have separate trusts, then the surviving spouse would most typically have limited control.
- Financial Transactions: it would be easier for the surviving spouse to sell property or assets listed in the joint trust compared to if the property or assets were connected to the deceased spouse’s single trust.
Choosing the Best Trust for Your Family’s Future
These examples only highlight some of the advantages of choosing a single or joint trust. Each family is different, and couples should decide which type of trust structure best fits their needs.
The team at Krause Estate Planning is ready to help with decisions like this. Experience is critical for these types of decisions, and our founder, Dan Krause, has helped thousands of clients feel better about their futures. Krause Estate Planning serves individuals and families through Wisconsin including in Janesville, Madison, Middleton, Milwaukee, Oregon, Sun Prairie, Verona, and Waunakee.
Reach out online or by phone to learn more — (608) 344-5491