Revocable Trusts for One . . . or Two?

Married couples must decide whether to use a joint revocable trust or to have each spouse create his or her own trust. (A revocable trust, as the name suggests, is one that can be canceled by the creator. Such trusts can protect you in case of incapacity and enable your heirs to bypass probate.) Many tax pros recommended individual trusts, for the following reasons:

• If the IRS imposes a lien against one spouse, the assets in the other spouse’s trust might not be jeopardized.
• If one spouse dies, the survivor may have easier access to the assets in his or her own trust than would be the case with a joint trust.
• Each spouse builds an individual credit history.

You should be wary of any attorney who tells you the cost of creating two separate trusts will be much greater than the cost of a joint trust. There should be only a token extra charge. For more information on how to set up a revocable trusts, FEDweek’s Handbook of Trusts is the best place to start. For more info on this handbook, go to the publications section of our website: https://www.fedweek.com.