Joint Revocable Trust for Married Couples in Florida: Exploring the Benefits & Disadvantages

Key Takeaways on Joint Revocable Trust for Married Couples

• Joint revocable trusts are helpful estate planning tools in Florida that help married couples who share assets and have common estate planning objectives – it provides for simplicity and unity.
• While joint revocable trusts allow for cost savings, they may not be as flexible as separate trusts if the couples have different goals.
• Both joint revocable trusts and separate trusts provide the benefit of probate avoidance.
• Blended families and Florida homestead laws are key considerations when deciding between joint revocable trusts and separate trusts.

An Introduction to the Joint Revocable Trust for Married Couples

After overcoming the initial hurdle of determining whether a couple’s estate plan should include a revocable trust in Florida, the natural transition is to whether they should draft a joint revocable trust or separate trusts.

As we have explored previously, revocable trusts are often used in Florida as probate avoidance tools. However, married couples have the added option of creating two separate trusts of just one revocable trust agreement that governs both spouses’ assets.

The following article examines both the benefits and disadvantages of married couples creating a joint revocable trust in Florida as well as certain important considerations that help a couple decide. It is important to remember that the information contained herein is intended for legally married couples as Florida does not recognize common law marriages.

What Exactly is a Joint Revocable Trust?

In Florida, both spouses may create a single trust to hold and manage their assets together, rather than in separate trusts.

Typically, both spouses will serve as co-trustees during their lifetime. And when one spouse passes away, the surviving spouse continues on as the trustee, allowing them to maintain control of all the assets.

Only after the surviving spouse passes away that the trust then becomes irrevocable and the assets are passed on to the named beneficiaries.

Contrarily, when a married couple elects to have separate revocable trusts, they each set up their own agreement and usually serve as their individual trustees. While they may list the same beneficiaries, each trust operates independently of the other.

Benefits of Joint Revocable Trusts for a Married Couple in Florida

As with separate trusts, joint revocable trusts in Florida are intended to avoid the expense and time of administering a last will and testament through probate. However, it may not be suitable in all situations.

One of the main benefits of a joint revocable trust is to ensure a smooth transition at the death of the first spouse. For example, it makes sure the surviving spouse has immediate access to the trust assets, and it simplifies the management of share property.

More specifically, a joint revocable trust can benefit a married couple by ensuring:

1. Reduction in costs

Typically, the creation of one revocable trust will be cheaper than two to both create and to administer when the time comes. And while the value in any type of trust usually outweighs the costs, the savings is always a noted benefit when there is no other compelling reason to create separate trusts.

2. Probate Avoidance

Truthfully, the probate avoidance benefit is shared by both separate and joint revocable trusts. This is particularly beneficial when the joint revocable trust is properly funded to hold all assets meant to be shared between the couple.

3. Immediate Access to Surviving Spouse

At the passing of the first spouse, the surviving spouse will usually have immediate access to the assets of a joint revocable trust without any delay, unlike in cases of dual trusts. When couples opt to create separate trusts, a surviving spouse experiences some delay in accessing the assets of the deceased spouse due to the need to administer the trust. While such a delay is nowhere near that of administering a last will and testament through a probate case, it may lead to interruptions in the flow of funds for ongoing and regular expenses, such as household bills etc.

4. Appropriate for Shared Goals and Management

A joint revocable trust is usually a perfect tool for couples who share common financial and planning goals. Further, arrangements in which both spouses serve as co-trustees have the added benefit of ease of management in the case of incapacitation or illness without court or third-party involvement.

5. Simplicity and Efficiency

While lastly, it’s certainly not least, the benefit of simplifying administrative efforts, paperwork and costs is a motivating factor amongst couples who opt for the joint revocable trust in Florida.

Disadvantages of Joint Revocable Trusts for Married Couples in Florida

1. Blended Families

The needs and objectives of blended families are usually the most compelling argument against joint revocable trusts in Florida. Usually, second marriages involve heirs such as children from prior relationships. A joint revocable trust may leave all assets under a surviving spouse’s control, thereby leading to the disinheritance of intended heirs. Therefore, it is important than the attorney representing the couple understands such objectives and drafts the documents carefully to avoid such unintended consequences.

2. Potential Florida Homestead Issues

In Florida, the homestead laws meant to protect spouses and heirs can be complicated. Placing a homestead property into a joint revocable trust may lead to unintended consequences such as the property being administered through the probate court. Therefore, it is imperative to consider all consequences and ensure that transferring a homestead property to a joint revocable trust is appropriate.

3. Less Flexibility for Differing Objectives between spouses

In circumstances where each spouse has separate assets and/or different objectives for their portion of each asset, a joint revocable trust may not be the best idea. This is particularly the case with blended families where dual or separate trusts allow for more control of the individual spouse.

4. Amendments and Changes

In Florida, a joint revocable living trust requires both spouses to work together to effectuate any amendments or changes to the original trust agreement. Therefore, in situations where one spouse chooses not to cooperate, making alterations to the original trust agreement can be problematic. This is particularly the case when spouses may be initiating separation or divorce.

Comparison: Joint Revocable Trusts versus Separate Revocable Trusts

To better understand the pros and cons of creating a joint revocable trust over a separate revocable trust, the following chart compares 6 commonly cited factors that are considered when clients are deciding which is better for their needs:

Ideal scenario for a Joint Revocable Trust in Florida

While a joint revocable trust is not appropriate for all married couples, it best suits those couples who own all or most of their assets jointly, completely agree on how their estates are to be administered/distributed upon the passing of both spouses, and desire simplicity and cost savings during and after their estate planning process.

This usually excludes those with blended families, substantially separate assets, heirs from prior marriages or differing estate planning goals.

Frequently Asked Questions

Conclusions on Joint Revocable Trusts for Married Couples

Like most legal estate planning tools, choosing between a joint revocable trust and separate trusts involves the consideration of several factors including, but definitely not limited to, long-term objectives of the married couple, family dynamics, and the ownership of the subject assets.

When helping our Florida clients evaluate between a joint revocable trust and separate trusts, we at ASR Law Firm consider their short-term goals and long-term needs, as well as relevant Florida laws to create a customized plan.

To learn more about how we may be able to assist you clarify your options, contact us to schedule a complimentary consultation.