What Is the Best Type of Trust for a Married Couple?

Types of Trusts for Married Couples

The best trust for a particular couple depends on their goals. Understanding the options before you meet with your lawyer can help you make the most of your time with them.

Trust Types

At their core, trusts vary in two important ways. The first is whether the creator, called the grantor, can change or cancel the trust without the consent of beneficiaries, the trustee, or both. When a grantor retains the right to make changes or take back trust property, the trust is revocable. The trust is irrevocable when a grantor does not retain those rights. 

The second way trusts vary is in how they are funded. If a grantor creates and funds a trust by transferring property into it while alive, it is a living trust (or “inter vivos”). When the grantor creates the trust in their will or does not fund it until their death, the trust is testamentary.

Revocable Living Trust

A revocable living trust allows a couple to retain control of their assets during their lives and transfer them to beneficiaries after death, without going through probate. Primary benefits include:

• Making changes or revoking at any time,
• Avoiding probate, and
• Maintaining privacy.

Potential drawbacks include:

• No asset protection from creditors;
• No immediate tax benefits; and
• Ongoing asset management and funding.

A revocable trust is a flexible tool for couples who want to simplify asset transfers without losing control over their property.

Irrevocable Trust

Irrevocable trusts are particularly useful for asset protection and tax planning. They are legal arrangements where the grantor permanently transfers ownership of assets into the trust, giving up direct control. Primary benefits include:

• Protecting assets from creditors;
• Reducing estate tax liability; and
• Sheltering assets from Medicaid long-term care look-back calculations.

Yet, these trusts:

• Cannot be easily modified or revoked;
• Surrender direct control over trust assets; and
• May require careful legal drafting to accomplish goals.

An irrevocable trust can provide long-term security for couples who are comfortable giving up control over their property to achieve tax or asset protection advantages.

Individual Trust

Sometimes, it may make more sense for each spouse to create their own trust rather than combining assets into a joint trust. Every trust needs at least one trustee responsible for managing the trust to benefit those the trust names as beneficiaries. In an individual trust, each spouse holds and manages their separate assets independently, and they are the trustee for their own trust. This structure can offer more control and flexibility in some scenarios, especially when managing separate property or providing for children from previous relationships.

Joint Trust

In a joint trust, both partners contribute assets to a single trust and maintain joint control over those assets during their lifetimes. In this type of trust, both spouses act as co-trustees. This type of trust is typically best for couples in first marriages with jointly held property and common estate planning goals.

Marital Trust (A/B Trust)

A marital trust, often called an A/B trust, works to maximize federal estate tax exemptions for married couples. While both spouses are alive, they share a joint trust. When one spouse dies, the A/B trust splits into two sub-trusts: a “marital trust” (“A”) for the surviving spouse and a “bypass trust”  (“B”) that is irrevocable and preserves the first spouse’s estate tax exemption. Marital trusts can be particularly effective for high-net-worth couples or those wanting to protect children’s inheritance while still providing for the surviving spouse.

Factors Affecting What Trust Is Ideal

Every couple’s situation is unique. The ideal trust for one household might not work well for another. The trust or trusts you use should reflect your financial goals, family relationships, and long-term needs. An attorney can help guide you through your options based on your unique situation.

Estate Size and Tax Exposure

Tax planning considerations should always be part of the decision-making process. Couples with significant assets—typically estates valued near or above the federal estate tax exemption—may particularly benefit from irrevocable trusts that help reduce or defer estate taxes. 

Family Structure

Blended families, where one or both spouses have children from past relationships, often have to plan for different considerations. So, too, do couples who keep their property separate and do not, for example, have a joint bank account.

Control and Flexibility

Revocable trusts provide more flexibility but less asset protection and fewer tax-saving benefits. If your goal is asset protection, an irrevocable trust may be a better fit. Couples must weigh the value of retaining control against their long-term goals.

Medicaid and Long-Term Care Planning

Couples who may need Medicaid long-term care assistance may consider irrevocable trusts. Carefully structured trusts that are funded outside of Medicaid’s five-year look-back period can help individuals and couples qualify for long-term care coverage without having to first spend down their assets.

Probate Avoidance

Revocable living trusts offer a way to transfer property efficiently while avoiding probate. On the other hand, testamentary trusts often relate back to a will and are tied into the probate process.

How a Trust Lawyer Can Help

Choosing the right type of trust involves balancing legal, financial, and personal priorities. No two families have the same needs or goals, which makes working with an experienced estate planning attorney invaluable.

A trust attorney can help you:

• Evaluate your estate and identify potential risks,
• Recommend structures that align with your goals, and
• Draft customized trusts to reflect your family’s needs.

An attorney can also help ensure compliance with state and federal laws, update your trust over time, and explain how your trust interacts with other estate documents. 

Work with Robbins Estate Law

At Robbins Estate Law, we understand that no two families are alike. Our experienced team helps married couples create trusts that match their long-term goals—whether you want to avoid probate, protect your children’s inheritance, or reduce tax burdens. We offer personalized service and a deep knowledge of state and federal estate law. Contact Robbins Estate Law today to schedule a consultation.