Hi, Lee Phillips.
I want to talk to you about single trusts versus joint trusts
in a married couple.
Now here's the issue
I can set up a trust for him
and I can set up a trust for her
and I'll assume this is a standard married couple
him and hers
it could be two individuals whatever
but
I've got a trust that is one piece of paper for one person
and I've got a second piece of paper
which is a single piece of paper
for the other spouse.
Now I could also have a trust
which is one document
that talks about him and her
and what happens after one
of the spouses dies
that's called a joint trust.
Is it better to have the two single documents
or is it better to have the joint document
that addresses what happens when one dies
and after one dies and then the second one dies?
The answer is it's about six of one and a half dozen of the other.
I don't know
A lot of attorneys seem to do the joint trust
and it's somewhat
I'm gonna say cultural
certain parts of the country have separate trusts
and certain parts of the country seem to have joint trusts
is what they call them.
There are a couple of issues with them
the single trusts are a little easier to manage
after the individual dies
we can take his trust
in it we do what it says in his trust
if it's a joint trust
after one individual dies
then we have all the baggage in that trust
of talking about both spouses
but it talks about what happens after one spouse dies
and how its split up or how it's continued on without splitting up
there are lots of lots of
languages in it so it's really not too big of a deal.
One issue is
if I have a joint trust
it is easier for me
to divide it up
for estate tax purposes
after the first spouse dies
if I have separate trusts
then it's up to me
during lifetime to balance the values
in each one of those trusts
so that when one spouse dies
about half the estate
is in that trust
and it goes off and becomes an irrevocable trust
for estate tax purposes.
It could come over
and just all come in to the surviving trusses
surviving spouse's trust
so they would join
but then when the surviving spouse dies
the entire estate
is subject to the estate tax.
You may not be worried about that anymore
because the estate tax limits are relatively high
Trumpy raised it to basically $11.2 million
so if I do it properly
I can get $11.2 million for him
$11.2 million for her
so I can get what $22.4 million out
to the family.
Now that is scheduled in 2025
to sunset back to the 2017
or 16 rate
17 rate
of $5,600,000.
That's still a chunk
and a lot of people just don't worry
about federal estate taxes.
You might be in a state
that has state estate taxes
and and this tax issue is another YouTube
but
we may for some reason
have to split it
it's easier to split the joint trust
because all assets are held together and I can make the split
in the two separate pieces of paper
during your lifetime you have to balance them out.
Now
an advantage of the two pieces of paper
is I got him and I got her
if I'm in a non community property state
what we call a common law state
then these assets in this trust
are not exposed
if this spouse has a accident
or gets in trouble or whatever
we've separated the estate legally into two pieces
there's got to be a causal connection
that's another YouTube
got to be a causal connection
in order to draw this spouse in
if this spouse has a problem.
If I can break the causal connections
then all of this spouse's assets
are not exposed when this spouse gets in trouble.
Pretty cool, huh?
So I can get an asset protection value
out of the two pieces of paper
that I can't get out of the joint trust.
Now I can create a trust as a joint part
a his part, a her part
and it's all one piece of paper.
Then I can get this split the estate stuff
it's a little cleaner
looks a little better
if I've actually got a piece of paper for this trust
and a different piece of paper for this trust
the separate trusts.
Joint trust can do it
but it doesn't quite look as good
because there's just one piece of paper
if I'm really separating then why aren't there two pieces of paper?
Well there are two pieces of paper
its just all one piece of paper
there are two--says two things.
So six of one, half dozen of another
I don't know whether you want a joint trust
or you want the individual trusts
for one spouse
the other spouse.
This is Lee Phillips
talking about joint trusts versus single trusts