Can a married couple use joint tenancy until one spouse dies, then set up a trust for the survivor?
Yes, but this unfortunately has several problems associated with it. There is no guarantee that the surviving spouse will have time to set up a trust after the first spouse dies, or, more to the point, will actually get around to setting up a trust, regardless of the amount of time available. This method also loses the $3,500,000 Applicable Exclusion Amount tax advantage, because, like an outright gift, joint tenancy lumps all the assets in one spouse’s estate. In addition, the survivor will not see the increase in basis for the survivor’s interest as would happen in a community property state.
A. Yes, but this unfortunately has several problems associated with it. There is no guarantee that the surviving spouse will have time to set up a trust after the first spouse dies or will actually get around to setting up a trust, regardless of the amount of time available. This method also loses any Applicable Exclusion Amount tax advantage, because, like an outright gift, joint tenancy lumps all the assets in one spouse’s estate. In addition, the survivor will not see the increase in basis for the survivor’s interest as would happen in a community property state.
Yes, but this has several problems associated with it. There is no guarantee that the surviving spouse will have time to set up a trust after the first spouse dies, or, more to the point, will actually get around to setting up a trust, regardless of the amount of time available. This method also loses the Federal estate tax exemption of the decedent ($ 3.5 Million in 2009) because, like an outright gift, joint tenancy lumps all the assets in one spouse’s estate.
Yes, but this unfortunately has several problems associated with it. There is no guarantee that the surviving spouse will have time to set up a trust after the first spouse dies, or, more to the point, will actually get around to setting up a trust, regardless of the amount of time available. This method also loses the $1.5 million exemption tax advantage, because, like an outright gift, joint tenancy lumps all the assets in one spouse’s estate. In addition, the survivor will not see the increase in basis for the survivor’s interest as would happen in a community property state.
Related Questions
- Can a couple convert to a tenancy in common and, as a result, leave their share of their joint property to someone other than their spouse (e.g. their children)?
- When a married couple owes a joint liability and one spouse also owes an individual (non-joint) liability, how many Offers In Compromise are required?
- Can a married couple use joint tenancy until one spouse dies, then set up a trust for the survivor?
