When does it make sense for a husband and wife to have their own separate living trusts?

Question

And will we able to continue to file joint tax returns if we have separate living trusts? What are the pros and cons? Our atty has suggested this for us, but I am not sure I understand the benefits. Thank you.

I am looking for specific pros and cons as far as tax advantages go hopefully from a person with experience in this area. We do not live in a community state. Is this a more difficult administration than a simple marital trust while alive, and what are the benefits or shortcomings upon death?
Thank you.

Answer 1

it makes things simple when you get divorced but since you are taxing taxes i would say contract a cpa!!!

Answer 2

Listen im no attorney but from what i heard at a lecture conserning estate planing it seems that a trust is a instrument that a grantos uses to transfer property or assets under certain conditions. For tax reasons its beneficial because it will fall under a lower tax bracket. Depending on your stare of residence

If you have itunes go to itunesU and click the "Estate Planning for Financial Advisors" from Texas Teck university it goes in a much more detail than what im telling you. You will have a greater explanation that what im teling you. Good luck

Revocable Living Trusts
A revocable living trust is one created by the grantor during lifetime in which during his lifetime the grantor retains the right to revoke the trust, change its terms, or regain possession of the property in the trust.

1. When is the use of such a device indicated?
2. When the grantor wishes someone else to accept management responsibility.
3. When the grantor wishes to assure continuity of management and income flow of a business or other assets in the event of death or disability.
4. When the grantor wishes to secure investment advice.
5. When the grantor wishes to protect against his own legal incompetence or physical incapacity, or the incompetence or incapacity (physical, mental, or legal) of beneficiaries.
6. When the grantor desires privacy in the handling and administration of his assets during his lifetime and at death.
7. When the grantor wishes to minimize estate administration costs and delay at death.
8. When the client would like to see the trust (and the trustee) in operation.
9. When the client wishes to avoid ancillary administration of assets situated in other states by placing title in the trustee.
10. When the client would like to reduce the potential for an election against, or a contest of, the will.
11. When the client would like to select the state law under which the provisions of the dispositive document will be governed.

Answer 3

Separate trusts are great if you both have kids from previous marriages, and/or if there is ever a possibility of you both splitting up. In fact, it is even better if you both have separate checking accounts, separate savings accounts, everything. Besides that it makes it easier to divorce (if that should ever happens), but also when you pass, because there is no squabble over the stuff from relatives.
Separate wills, too...you are your own person, why not have your own things? Make sense now?

Answer 4

You might want to talk with your attorney more about the community property laws in your state as they might affect how you set up separate trusts.