If you are married, you and your spouse can choose to create separate estate plans, or you could alternately create a joint will or living trust. The right choice will depend on the circumstances and your ultimate intentions.
A separate arrangement can make more sense if both parties have children from previous marriages and they are entering the union with their own resources.
When partners have accumulated most of their assets jointly and they want to leave the property to one another, a shared approach can be preferable, and this will be our focus in this post.
It is possible to create a joint will with your spouse, but estate planning attorneys do not recommend this course of action. If you go this route, you and your spouse would leave everything to one another, and you would make your children the final inheritors.
The surviving partner would not be able to change the terms of the trust or dissolve it after the death of their spouse. This is supposed be a good thing in theory because it protects the inheritances that are going to be transferred to the children after the death of the survivor.
If this stipulation was not in place, a surviving spouse could get remarried and have different ideas about the way the resources should be used. On the one hand, this makes sense as a protective mechanism, but the loss of control can be problematic.
The surviving spouse may want to provide a child with an early inheritance to purchase a home or establish a business, but the terms of the trust may prevent them from doing so.
There may be no way to provide safeguards for an adult child that turns out to be a poor money manager, and a home sale may not be possible. These are a few of the scenarios that can enter the picture, but there are others.
Another negative with a joint will is the fact that it would be admitted to probate after the death of the surviving spouse. This is a public proceeding that takes place under the supervision of a court.
It will take eight months or more for the court to probate the estate, and no inheritances are distributed during this interim. Probate expenses consume a noticeable portion of the estate before it is distributed to the heirs, and this is another drawback.
Plus, the inheritors receive their inheritances in lump sums all at once. There would be no asset protection, and there would be no way to prevent the beneficiaries from burning through their inheritances too quickly.
Joint Living Trust
A joint living trust is another option that is preferable on every level if you and your spouse have children together and you are going to be leaving most of your property to one another.
While you are living, you would act as co-trustees, and you would name a trustee to succeed the surviving spouse after their death.
The community property would be conveyed into the trust, and you and your spouse could transfer your respective separate property into the trust as well. After the passing of one spouse, the other spouse would become the sole trustee, and they would control the community property.
When the trust is being established, you can name beneficiaries that will inherit your separate property, and your spouse can do the same. You could leave property to one another, or you could name different beneficiaries.
The surviving spouse can adjust the distribution terms for their own separate property that is in the trust, but the deceased spouse’s choices would be permanent.
After the death of the survivor, the children would receive distributions according to the terms of the trust. These distributions would not be subject to probate, so the estate administration process would be efficiently streamlined.
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