Across the state of Florida and in many states throughout the country, the burden of having to pay heavy taxes on an estate plan has been reduced or eliminated altogether. This has lead many married couples to decide to simply combine their assets into a joint trust, which means they can begin to focus on only one set of documents during their estate planning process. However, this also brings up lesser-known disadvantages. The following includes some of the most common disadvantages you’ll face and why it may be better to create a separate trust for each person.
In the event that you are involved in an automobile accident and are at fault, the other driver may file a lawsuit against you and your estate. If, during your estate planning process, you decided to file for a joint trust, then both of your assets may be in danger during a lawsuit. This is why so many couples choose to have separate trusts as it can leave one of them untouched and thus protect the family’s wealth.
Most married couples want their partner to obtain their assets once they have passed on. Issues arise when you begin to think of the possibility of your partner remarrying. Although remarriage is not the core issue, it is an avenue to bigger issues. For example, your partner may pass away, leaving the estate’s combined wealth to their new spouse instead of your loved ones. You can leave certain restrictions within your trust to prevent this issue from occurring. However, this is only possible if you have a separate trust as a joint trust won’t legally allow this.
As you can see from the information above, there are plenty of benefits to forming separate trusts. It is also important to have an experienced legal team to help you overcome any hurdles.