Archives for September 2023

Trusts can be a vital tool in estate planning. If you’re married, one option to consider is whether to establish a trust for your assets. A trust is a legal arrangement that allows you to appoint someone (called a trustee) to manage your property after you die. A trustee manages the assets for the benefit of beneficiaries that you designate.In Arizona, you and your spouse might choose to set up a trust together or individually. So, should a married couple have a joint trust or separate trusts? An estate planning lawyer from Brown & Hobkirk, PLLC can advise on the arrangement that makes sense for you.Safeguarding your family’s future starts today. Contact us for a free consultation.Understanding Joint Trusts vs. Separate TrustsA joint trust is created by two individuals, typically spouses, who place assets into a single trust for their mutual benefit. For example, you and your spouse might set up a joint trust, where you’re both the grantors and the initial beneficiaries. When your spouse passes away, you (as the surviving spouse) usually continue to benefit from the trust. Upon your death, the assets in the trust are then passed on to your children, charities, or other designated beneficiaries.A separate trust is established by an individual for their benefit or the benefit of others. This type of trust is common for people with specific assets they want to keep separately. Some people also establish separate trusts when they have particular wishes regarding managing or distributing their assets when they die. For instance, if you marry and have significant separate assets, you might create a separate trust to control those assets.Pros and Cons of a Joint TrustAs you make decisions on the right type of trust for you, here are some advantages and disadvantages to consider:Pros of Joint Trusts:Streamlined management: Combines assets for easier managementUnified estate planning: Offers a cohesive plan for married or partnered couplesTax benefits: Offers tax advantages for married couples in some situationsIncapacitation protection: Allows one spouse to manage the assets if the other is incapacitatedCons of Joint Trusts:Lack of flexibility: Might not suit couples with substantial separate assetsPotential for disagreements: Requires significant joint decision-makingRemarriage issues: Complications can arise if a surviving spouse remarriesCreditor exposure: Joint assets might be vulnerable to one spouse’s debtsPros and Cons of a Separate TrustPros of Separate Trusts:Individual control: Individuals can tailor trusts to their specific wishes and needsAsset protection: Protects personal assets from the other spouse’s creditorsFlexibility in asset distribution: Each spouse can designate different beneficiariesIndependent decision-making: No need for joint decisions, which can make management easierCons of Separate Trusts:Complexity: Managing two or more trusts can be more complicated than one joint trustPotential for inconsistencies: Separate estate plans might have conflicting instructionsPossible missed tax advantages: Some joint tax benefits might not apply to separate trustsAdditional costs: Could involve higher setup costs and ongoing administrative expensesShould I Get an Estate Planning Lawyer?Estate planning requires a comprehensive understanding of the law, so hiring an attorney is crucial to protecting your legacy. A knowledgeable estate planning lawyer can explain the type of trust that might benefit you most. They can also:Draft trust agreementsTransfer assets into the trustAdvise you on tax implicationsReview beneficiary designationsCoordinate with financial advisorsPrepare associated estate planning documents like wills or powers of attorneyUpdate the trust as laws or personal circumstances changeGuide you on trustee selectionsHandle trust termination or modification proceduresHelp avoid potential estate litigation between beneficiariesContact Brown & Hobkirk, PLLC TodayAre you thinking about creating or updating a trust? Reach out to Brown & Hobkirk, PLLC for a free consultation. We can help you protect your future and reach your goals. Robert HobkirkRobert Hobkirk is a partner at the law office of Brown & Hobkirk, PLLC. He represents clients in legal matters involving trusts and estates, wills, probate law, and estate litigation, among other areas.Read Morewww.brownhobkirk.com/about-us/robert-hobkirk/

Archives for September 2023

Difference Between Joint Trusts vs. Separate Trusts

Recommendations and Tips for Selecting the Right Trustee