A joint trust is a trust created by two people who both act as co-trustees. A couple may use a joint trust if they want their money and belongings managed in the same way after they die, and it can be especially useful for married couples that live in a community property state.
Joint trusts can help avoid probate, but may offer less flexibility than separate individual trusts. You may not want to use one if you and your spouse have different trust beneficiaries in mind or want to distribute your assets differently.
How does a joint trust work?
With a joint trust, two individuals, usually spouses, open a single trust and each serves as a co-trustee. When one spouse dies, the surviving spouse becomes the sole trustee and manages the trust. After the second spouse dies, a joint trust becomes irrevocable since it can’t be amended. A successor trustee will step in to manage the trust and distribute trust assets to the final beneficiaries according to the instructions in the trust document.
Ownership of joint trust assets is split between the spouses. Regardless of which spouse dies first, you should expect that the assets in the trust will be treated the same way. It's difficult to create a joint trust where the beneficiaries receive certain assets if only one spouse dies first, but different assets if the other spouse dies first.
How to create a joint trust
You can generally create a joint trust the same way you would set up any other trust. You may be able to create a trust by working with an estate lawyer or using a digital service. You may also want to include a trust schedule, or an informal inventory of the trust property. With a joint trust, you may need multiple schedules (e.g. one for marital property, another for a spouse's separate property).
Along with a joint trust, it can be useful for spouses to make mirror wills. Each spouse creates their own mirror will, and both wills lay out the same (or very similar) instructions for how their assets are handled after death. A mirror will can help avoid creating wills that conflict with each other.
Should married couples have a joint trust?
A standard joint living trust can benefit many couples who want a safe way to pass on assets while avoiding probate. If you create a joint revocable trust with your spouse, then you have the ability to change its terms or remove assets in and out of the trust.
Two more advantages of a joint trust is that general trust administration is usually easier, and maintenance costs are generally lower if you have a single trust versus two separate trusts.
In general, you should only consider a joint trust as part of your estate plan if you are comfortable splitting ownership of all the trust assets with your spouse; your spouse also has equal control over the trust while you're both alive.
Make sure you're also comfortable with the fact that your spouse will own the trust outright if you die. It's also advisable that you be confident your marriage will continue, since going through a divorce with assets in a joint trust can be logistically challenging.
Joint trusts and community property
Couples who live in community property states may especially want to consider a joint trust, because separating ownership of jointly owned assets could be very challenging.
In community property states, both spouses have joint ownership over property and other assets acquired during their marriage — potentially including bank accounts, retirement accounts, investments, and life insurance policies. Because it can be complicated for one spouse to create an individual trust and transfer joint property into it, this type of trust may be the best option.
Reasons not to open a joint trust
One of the biggest reasons you may not want to create a joint trust is that it generally offers lower flexibility than an individual trust. For example, if one spouse wants to remove a beneficiary from the trust or just adjust what each beneficiary receives, they need the other spouse to agree. (If the spouses have created mirror wills, then those may also need to be updated, too.)
Here are four other reasons you may not want to create a joint trust:
You have personal assets in addition to your community property, and you want them handled differently than your jointly owned assets after you die.
You or your spouse want to leave money or assets to children from a previous marriage, or other members of a blended family.
You or your spouse expects a windfall and is worried about estate tax. The federal estate tax exemption is $13.61 million in 2024, but state-level thresholds are much lower. Also note that an improperly drafted trust may not qualify you for the marital deduction.
You or your spouse is sued or owes money. It’s possible for creditors to collect assets from a joint revocable trust even though they belong to both spouses. If you need asset protection consider an individual irrevocable trust instead.
If any of these situations applies to you, think about hiring an estate planning attorney to help draft your estate plan.
