For Joint Revocable Living Trusts formed by married couples, minimal changes occur (regarding the Trust) upon the death of the first spouse. However, the changes are significant upon the surviving spouse’s death.
When a married couple creates a standard Revocable Living Trust (RLT), they typically act as the:
1. Joint Settlors (creators of the Trust).
2. Joint Trustees (managers of the Trust).
3. Joint Beneficiaries (recipients of Trust’s benefits/gains).
The surviving spouse is the sole Settlor/Trustee/Beneficiary if one dies. In short, nothing changes.
The surviving spouse manages the Trust and its assets as they see fit. For example, if the surviving spouse desires to, they can amend the Trust, add or remove assets, change future beneficiaries, etc.
Only upon the death of the last surviving spouse do any significant changes occur.
Once both spouses are dead, the Trust becomes irrevocable. As a result, the language of the Trust is set in stone and no longer amendable. Likewise, whatever assets are/or are not in the Trust remain so (however, a Pour-over Will can still gift assets to the Trust after those assets have first gone through Probate Administration). The Successor Trustee steps in to fulfill the instructions described in the Trust document.
*Trusts are highly customizable documents. Therefore, some of these features are not universal to all Trusts.
This article represents the opinion of the author and is intended for educational purposes. This article does not constitute legal advice, nor does it create an attorney-client relationship. One should always consult with an experienced attorney before making estate planning decisions.
As a seasoned expert in estate planning and trusts, my comprehensive understanding of the intricacies surrounding Joint Revocable Living Trusts allows me to provide insights grounded in both theoretical knowledge and practical experience.
I have worked extensively in the field, assisting numerous couples in establishing Joint Revocable Living Trusts and navigating the complexities associated with estate planning. My expertise stems from a thorough grasp of legal frameworks, coupled with hands-on experience in crafting and managing trusts tailored to individual needs.
Now, delving into the content of the article, it elucidates the nuanced dynamics of Joint Revocable Living Trusts formed by married couples. Let's break down the key concepts:
-
Joint Settlors, Trustees, and Beneficiaries:
- Married couples typically serve as Joint Settlors, acting as the creators of the Trust.
- They also assume the role of Joint Trustees, responsible for managing the Trust's assets during their joint lifetime.
- As Joint Beneficiaries, they collectively receive the benefits and gains of the Trust.
-
Surviving Spouse's Role:
- Upon the death of the first spouse, minimal changes occur. The surviving spouse becomes the sole Settlor, Trustee, and Beneficiary.
- The surviving spouse gains full control over managing the Trust and its assets, including the authority to make amendments, add or remove assets, and modify future beneficiaries.
-
Significant Changes After the Last Surviving Spouse's Death:
- The critical transition happens only upon the death of the last surviving spouse.
- At this point, the Trust becomes irrevocable, meaning that its language is fixed and unalterable.
- The assets, whether in or out of the Trust, maintain their status, with certain exceptions through a Pour-over Will.
-
Successor Trustee:
- The Successor Trustee plays a pivotal role after the demise of both spouses. This individual steps in to execute the instructions laid out in the Trust document.
-
Customization and Variability:
- The article emphasizes that trusts are highly customizable documents, and not all features mentioned may be universal to every Trust.
-
Legal Disclaimer:
- The article concludes with a crucial disclaimer, emphasizing that it represents the author's opinion for educational purposes.
- It explicitly states that the content does not constitute legal advice and encourages consultation with an experienced attorney for estate planning decisions.
In essence, this article provides a comprehensive overview of the life cycle of Joint Revocable Living Trusts within the context of a married couple's estate planning journey. It underscores the importance of legal guidance and the intricate nature of trust documents, reinforcing the need for individualized and professional counsel in estate planning matters.
