When married couples start to plan their estate, they may realize that it is much more practical to set up a trust that they share together rather than to set up one individually. This process is known as a shared marital trust, or a shared living trust. Trusts mean that the transfer of assets from the grantors to the beneficiaries will avoid going through probate.
Shared marital trusts work by housing all of the couple’s property. This means that together they are co-trustees and have a joint, equal right to all the assets within. To make an amendment to the trust, both parties must give consent. However, to terminate the trust, only one person needs to express the wish.
When one spouse dies, the trust is effectively split into two. The trust that existed when both spouses were alive will be split into two, half going to the beneficiaries of the trust, and half forming a new trust with all the spouse’s owned property and inherited property.
Shared marital trusts are advantageous to many couples because it means that much of the procedures are automated. A spouse can inherit wealth from their deceased partner without having to go through any specific procedure. It gives full trust to the surviving spouse to be able to distribute wealth from the trust to the beneficiaries.
If you are considering creating a shared marital trust or if you have any concerns or questions about an existing shared marital trust, it is advisable to speak with a trusted legal practitioner who can help you with your situation.
Source: This matter, “Shared Marital Trusts,” accessed Oct. 06, 2017