How to Set Up a Joint Revocable Trust

By Louis Kroeck

A joint revocable trust is a type of living trust where you with your spouse, or you with another party, assign property to a trust to be distributed after you die under the guidance of a trustee. Spouses typically use joint revocable trusts to avoid probate and create a living trust for both spouses in a single document. As the name suggests, a revocable trust can be revoked by one of the creators at any time. Joint revocable trusts will have different requirements and advantages in every state and as such, it's advisable to contact an estate attorney or a document preparation service before setting up a joint revocable trust. If you do decide to create a joint revocable trust, the allotted assets in the trust will pass through your trust at your time of death rather than through your will. Prior to proceeding, you will need to familiarize yourself with some terminology associated with trust funds. The person creating the trust is known as the grantor or trustor, while a trustee is the organization or individual in charge of administering the trust. A beneficiary is the individual who will receive the proceeds of the trust, while residuary refers to any property remaining in the trust after the beneficiary has received the benefits of the trust.

Step 1

Study all state law related to joint revocable trusts and property transfer considerations in your state of residence. In addition to being a community property or a non-community property state, your state may have other specific considerations related to creation of joint revocable trusts.

Step 2

Establish what property will be held in your joint revocable trust. Determine what contributions you and the other grantor will make to the trust. Cash, stocks, property and bonds are all typical assets held in trust.

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Step 3

Determine who will benefit from the trust following your death and the death of the other grantor. Typical beneficiaries include children and relatives. However, a variety of other potential beneficiaries exist including pets and charities in most states.

Step 4

Select a trustee to manage the trust. During your lifetime, you and the other grantor may serve as trustees, but you will need to determine who should serve as trustee following your death. Typical selections include a bank or a financial institution, a trusted family friend, or an estate attorney. Contact the proposed trustee and determine if they would be willing to act on your behalf.

Step 5

Draft a joint revocable trust agreement in accordance with the laws of your state and with the assistance of an attorney or online legal document preparation service. The trust will need to establish guidelines for how property will be transferred between grantors, applicable beneficiaries, a trustee, trustee powers, termination provisions, trust residuary procedures and instructions regarding execution of the trust. Your trust agreement will also need to detail how the beneficiaries may use any funds that are to be allotted. Common restrictions might include that the funds be used for educational purposes or only for purposes related to basic living expenses. Your trust agreement must also state the rights, powers and duties of the trustee and how the assets to be held in trust must be handled by the trustee.

Step 6

Execute your trust in front of a public notary. You, the other grantor and the trustee will all be required to sign the joint revocable trust agreement.

Step 7

Transfer property to the trust in accordance with your trust agreement.

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Special Needs Trusts Vs. Revocable Trusts in Connecticut



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Can I Put Jointly Held Property in a Living Trust?

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The Pros & Cons of Making a Will

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What Is a Non Testamentary Trust?

A trust is a legal document that allows a trustee to hold property for the benefit of others, known as beneficiaries. Trusts are created when a grantor or settlor asks the trustee, which can be a company or a person, to hold and distribute money or property to beneficiaries. The grantor names beneficiaries in the trust documents, and the money and property in the trust will be distributed based on the grantor’s instructions. For example, a grantor can designate that no money is to be distributed to beneficiaries unless it relates to their health, education or welfare. Trusts typically fall into one of two large categories: testamentary and non-testamentary trusts.

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