July 22, 2025
Couples often ask whether to create one joint revocable living trust or two individual trusts. There isn’t a one‑size rule; the right answer depends on your state’s property system, your asset mix, your family structure, and your goals around probate avoidance, privacy, and incapacity planning. This guide explains the pros and cons of a joint living trust, how to fund it, and when separate trusts are a better fit—especially in blended families.
A joint living trust holds property for both spouses (or partners) during life. You are typically co‑trustees, managing assets together. If one person becomes incapacitated, the other continues as acting trustee without court involvement. At the first death, the trust can (a) remain as one pot for the survivor, or (b) split into sub‑trusts per the drafting (for example, a survivor’s share and a bypass or protected share).
Advantages couples value:
Simplicity. One document to manage shared assets; one certificate of trust to show banks and title companies.
Continuity. If one spouse is ill, the other already has authority to act—no guardianship proceeding required.
Probate avoidance. Assets already titled in the trust generally avoid probate at each death.
Blended families. If you each have children from prior relationships, separate trusts clarify what belongs to whom and can reduce conflict.
Separate property goals. If one spouse brings significant separate property into the marriage or expects an inheritance, separate trusts help maintain records and targeted dispositions.
Specialized tax planning. At certain wealth levels, separate structures may add flexibility for disclaimer or bypass planning.
In community‑property states, a joint trust can help preserve community characterization and, in some designs, achieve a favorable basis outcome at the first death (discuss with your tax adviser). In separate‑property states, many couples still prefer a joint trust for ease of management, but when clarity about “yours, mine, and ours” is important, two trusts can be cleaner.
Real estate. Deed the home and any rentals to the joint trust using the exact trust name and date. Notify title and insurance carriers.
Brokerage accounts. Convert joint/in‑common accounts to the joint trust or open a new trust account and transfer positions.
Bank accounts. Either retitle to the joint trust or keep daily‑use accounts in individual names with POD to the trust.
Personal property. Sign an assignment of personal property to place household goods and valuables into the trust.
Retirement accounts. Keep ownership in each spouse’s individual name; coordinate beneficiary designations (each spouse typically names the other as primary, then the trust or children as contingents).
Consistency matters. Use the trust’s exact legal name and date on every deed and form to avoid bank and title delays.
Each spouse should sign a pour‑over will naming the same executor (or alternates) and nominating guardians if you have minor children. The pour‑over will is the backstop that moves any leftover personal‑name property into the joint trust at death.
Name one or two successor trustees who can step in if one spouse is incapacitated or after the first death. Many couples choose an adult child, sibling, or trusted friend; for long‑term management, a professional or corporate trustee can serve as an alternate. Provide clear spendthrift protections and staged distribution options so the successor trustee has guidance.
Staged distributions for adult children to encourage financial maturity.
Spendthrift clauses to shield beneficiaries from creditors and imprudent spending.
Specific gifts to each branch of a blended family, then a percentage‑based residuary.
Accounting and information rights so beneficiaries understand timing and expectations.
If one spouse becomes unable to manage finances, the other generally continues as trustee without a court proceeding. Pair the trust with updated durable powers of attorney (for non‑trust assets) and advance healthcare directives to round out incapacity coverage.
Aligned goals, mostly joint assets. A joint trust is often ideal: one deed for the home, one brokerage account, one set of instructions. Both spouses sign pour‑over wills for stragglers.
Blended family with adult children. Consider two coordinated revocable trusts (or a joint trust with mandatory sub‑trusts at the first death). Each spouse can protect their children’s share while providing lifetime support for the survivor.
Multi‑state real estate. A joint trust avoids ancillary probate by titling each property in the trust. Keep recorded deeds and insurance endorsements in the trust binder.
Half‑funded trust. You sign the document but never record deeds or retitle brokerage. Fix: Complete funding within 60–90 days; keep a checklist.
Inconsistent names/dates. Mismatched trust captions slow banks. Fix: Copy the trust’s title exactly.
No alternates. If your first successor trustee can’t serve, you don’t want to scramble. Fix: Name at least one alternate.
Ignoring beneficiary designations. Retirement accounts and life insurance flow by form, not by trust language. Fix: Align designations the same day you sign.
Family structure: Purely joint household or blended?
Asset profile: Mostly joint assets, or distinct property on each side?
Goals: Probate avoidance, privacy, incapacity planning—vs tax or protection complexity?
Administration: Who will serve as successor trustee and handle records?
If your assets and goals are shared and straightforward, a joint living trust is simple and effective. If clarity between spouses or children is essential, separate trusts (or a joint trust with mandatory sub‑trusts) may be wiser.
Set up your joint trust the right way: Online Revocable Living Trust → /product/online-living-trust/
Add pour‑over wills for both spouses: Online Last Will & Testament → /product/online-last-will/
William is a personal finance journalist and writes on matters affecting people and their finances.
Author
William is a personal finance journalist and writes on matters affecting people and their finances.
