Can You Do a Joint Living Trust?
A trust can hold titles on properties that are owned by one or more owners. There are a several steps a trust settlor -- a person who sets up a trust -- must take to set up a joint living trust.
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Identification
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A joint living trust is ideal for families and parents of minor children. Parents seeking to pass on an estate to future generations can establish a joint living trust to protect assets from future creditors and the rigors of probate court. As a whole, joint living trusts are incontestable and can be settled fairly quickly after the death of both settlors.
Considerations
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Frequently, when two settlors establish a living trust, both parties manage the trust as co-trustees. Joint living trusts have a right to survivorship. Under the rule of survivorship, if one settlor dies, the power and management of the trust benefits the surviving settlor. If the surviving settlor does not wish to assume complete control over the trust, she can appoint another co-trustee. A successor trustee will ultimately take over once the surviving settlor dies.
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The Transfer Process
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When creating a joint living trust, both parties must fund the trust with property -- such as real estate or an automobile. To transfer ownership of property to a trust, both parties must sign and date an "Agreement for Sale and Purchase," an instrument whereby property is sold from one entity to another. The agreement will include the names of the parties involved in the trust and the fair market value of the property being sold. High value assets such as real estate property and automobiles require an appraisal report from a certified appraiser. Both parties must sign and date the agreement form in front of a witness and a notary public. The trust will maintain ownership of the property and hold title on it until one or both settlors die.
Irrevocability
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When a trust is jointly managed by a married couple and one spouse dies, a trust sometimes becomes irrevocable, meaning it cannot be revoked. The surviving spouse is left to act as a "successor trustee." Acting as the successor trustee, the surviving spouse must administer trust property. Titles held by the trust cannot be revoked or altered at this time. A beneficiary will take ownership of trust property on the death of the last surviving spouse.
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