Our software creates a joint trust for spouses living in a community property state. A joint trust is a single trust document that covers both spouses. The trust provides provisions for what happens on the death of each spouse.
Our documents are designed around a joint trust approach for several reasons. A joint trust can be easier to create and manage in a community property state. A joint trust avoids the complexities of splitting community property into separate parts to be held in separate trusts. This also helps avoid potential undesirable tax consequences.
A joint trust helps preserves the community property form of ownership, which can be beneficial upon the death of one spouse. There may be some tax benefits to holding the assets as community property in a joint trust rather than holding the assets in separate trusts as something other than community property.
In most cases, each spouse still has control over their interests in a joint trust and each spouse can revoke a joint trust. Should that happen, the assets would be returned to the spouses in the same way they were held before they were added to the trust.
If you have concerns about using a joint trust or wish to use separate trusts in a community property states, you may wish to consult a qualified attorney for more information.