Can I Put Jointly Held Property in a Living Trust?

By Jane Meggitt

Generally, you place assets into a living trust for your management, use and benefit during your lifetime, with those assets passing to beneficiaries after your death, without going through the probate process. These assets are titled in the name of the trust, typically with you as the trustee. While you might put jointly-held property into a living trust for a variety of reasons, the overriding purpose should not be to avoid probate, since jointly held property normally passes directly to the joint owner at death without going through probate.

Jointly-Owned Property

If you hold property jointly with another person, depending on how the property is titled, it should automatically pass to that individual after your death. This would include bank accounts titled as joint owners with right of survivorship or real estate owned jointly or as tenants in common. Although jointly-owned property passes automatically, if co-owners die simultaneously, such as spouses in an accident, that asset may be subject to probate if not held in a trust.

Living Trusts

The most common type of living trust, the revocable living trust, may be changed or terminated at any time by the individual creating it, known as the grantor. Assets placed in the trust, such as a house, stocks and bonds or bank accounts, belong to the trust and must be re-titled as such. However, by naming yourself as trustee, you have the benefit of these assets during your lifetime. The trust also names beneficiaries who receive the assets after your death. Proceeds from the trust during your lifetime are reported on your personal income tax return. You can have your attorney draft a trust agreement or use a trust kit from an online document provider.

Protect your loved ones. Start My Estate Plan

Joint Living Trusts

Rather than creating individual trusts, spouses may create joint living trusts, with both husband and wife acting as grantors and trustees. Both jointly and individually-owned assets may be placed in such trusts. Each person may revoke the trust during his or her lifetime. If either person revokes, any property in the trust goes back to the way it was titled before being placed in the trust.

Other Exceptions to Probate

For many people, a major reason for establishing a living trust is to avoid property going through the probate process after their death. However, property going through probate is generally titled solely in the decedent's name. You may also arrange for transfer-on-death provisions for beneficiaries for brokerage and mutual fund accounts or stock shares, or payable-on-death provisions for bank accounts. These assets then pass directly to the beneficiaries, bypassing probate. Certain assets, such as IRAs, 401(k)s and life insurance policies, do not go through probate, as you name the beneficiaries for these instruments.

Protect your loved ones. Start My Estate Plan
How to Void or Cancel a Living Trust
 

References

Related articles

Living Trusts & Bank Accounts

You can place your bank accounts and other assets in a living trust so they bypass probate when you die. Avoiding probate generally saves time and money for the beneficiaries of your estate. You must physically change the titles of your assets from your individual name to the name of your trust for them to skip the probate process upon your death.

Can a Property Owned by an Irrevocable Trust Be Foreclosed?

A living trust is an estate planning tool used to transfer property at death, allowing probate to be avoided. When you place property into a trust, it is retitled or redeeded to the trust. Thus, transferred property legally belongs to the trust. However, mortgaged property held in trust can still be foreclosed upon.

How to Create a Revocable Trust

A revocable living trust allows you to provide for the distribution of your property after your death. When you set up a trust, you help your heirs and family avoid the probate courts, which must review and authorize any will. “Revocable” means that you can change the trust at any time, or cancel it altogether. Creating a trust is a straightforward matter of preparing and signing a document, which contains certain provisions and conforms to the law.

LegalZoom. Legal help is here. Start Here. Wills. Trusts. Attorney help.

Related articles

Items That Are Not Part of a Probate Estate in Pennsylvania

Not all of a decedent's property in Pennsylvania falls under the state's probate laws. Whether or not a particular ...

Should a 401(k) Be Put Into a Living Trust?

A living trust can be an important part of an estate plan, allowing assets to pass directly to named beneficiaries ...

What Items Should Be Put Into a Living Trust?

A living trust is created during a person's lifetime and comes in two types: revocable and irrevocable. A revocable ...

How to Name a Living Trust

A living trust is a plan in the form of an agreement that manages all the property you place into the trust while ...

Browse by category
Ready to Begin? GET STARTED