What is a Joint Living Trust?

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  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 13 August 2019
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A joint living trust is a trust that is used to unite the assets held by two spouses in a single trust. Sometimes used as a component in estate planning to insure the surviving partner in the legally recognized relationship retains access to all the assets, without the need to go through a probate process. There are a number of ways to structure this type of trust, making it necessary to consider what approach should be used to set up a living trust. In addition, there are some potential drawbacks that should be considered before creating and finalizing this type of financial arrangement.

In some instances, the joint living trust functions as an alternative to a last will and testament. This approach works well when the intent is to transfer ownership of all assets to the surviving partner once the other partner has died. For couples who do not have children or other heirs they wish to remember, this arrangement carries the benefit of allowing all assets to easily transition in ownership at the time of death. A joint living trust is considered an excellent option when the probate process within the local area is somewhat complicated, since the surviving spouse can bypass that process altogether.


While a joint living trust is primarily aimed at providing the surviving spouse with access to all the assets of the couple, that does not mean that children cannot be included within this arrangement. For example, the trust can be structured to allow the designation of a co-trustee. Naming an adult child as the co-trustee creates a situation where, if both the parents become incapacitated and cannot manage their assets, the co-trustee can step in and act on their behalf. Should both parents die at the same time, such as in an accident, the co-trustee can also take steps to manage the trust in accordance with whatever instructions were left regarding the disbursal of those assets.

Trusts of this type can be structured as revocable and irrevocable. With a revocable joint living trust, changes can be made at a later date, under certain circumstances. Should the couple divorce, this type of trust could be revoked entirely, or reworked to accommodate the change in the relationship. An irrevocable trust is more difficult to change or bypass, although this can sometimes be accomplished, depending on the prevailing circumstances, and any local laws that apply to the function of different types of trusts.

One benefit often cited for a joint living trust is the ability to manage the tax burden more effectively. Specifically, this type of trust can reduce or sometimes eliminate the need to pay estate taxes. If the desire is to provide the surviving spouse with control of the assets for the remainder of his or her life, then redirect those assets to provide support for children or grandchildren once both spouses are deceased, the trust may take on the form of what is known as a dynasty trust. Should there be children who are incapacitated and unable to care for themselves, the trust could be used to provide ongoing care for that child.

There are a few drawbacks associated with a joint living trust. If the combined assets of the spouses exceeds a certain amount, the estate may be assessed at a higher rate of tax as the assets are disbursed. Trusts of this type also block access to information in ways that last wills and testaments do not. This means that other relatives and heirs will not be able to obtain copies of the trust documents and determine if they are entitled to any of the assets included in the estate. While this is often a good thing, it can be problematic if the co-trustee is also no longer alive.


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