Can I Put Jointly Held Property in a Living Trust?

You can share property in a trust.

You can share property in a trust.

You can put jointly held property in a living trust. However, what you end up placing in the trust depends on the structure by which the property is held jointly as well as the structure of the trust. In some cases, it might be unnecessary to put the property in a trust at all.

Joint Trusts

One simple way to put jointly held property into a living trust is to create a joint trust. With a joint living trust, you and another person own the trust and the assets it contains. If one of you dies, the assets stay in the trust for the other person without that other person having to do anything about it.

Personal Interest, Joint Property

If you have jointly owned property but a separate trust, you can also put your interest in the trust. For instance, if you hold a property as a joint tenant with a parent and you want to protect your rights to it, you could put your ownership in a trust. This won't affect your mother's rights, but if something happens to you, whatever interest you have in the property will be handled by the trust instead of going through probate.

Joint Trusts and Community Property

When you are married and live in a state with community property laws -- usually one in the western United States -- a joint trust can make particularly good sense. In those states, assets that a married couple have are typically owned together rather than separately. As such, blending them in a second trust just matches what the reality of their ownership would be. This is different from a non-community-property state, where you and a spouse can have separate assets if you wish.

When Trusts Aren't Necessary

The primary benefit of a living trust -- especially a revocable one -- is the ability to keep the assets in the trust out of probate. However, when assets are held jointly, they usually stay out of probate anyway when they pass between the joint owners. If you and your father own something jointly, for example, it shouldn't have to go through probate when your father dies. Transfers between spouses also usually avoid probate. As such, you might not need a trust at all for your jointly held assets.


About the Author

Steve Lander has been a writer since 1996, with experience in the fields of financial services, real estate and technology. His work has appeared in trade publications such as the "Minnesota Real Estate Journal" and "Minnesota Multi-Housing Association Advocate." Lander holds a Bachelor of Arts in political science from Columbia University.

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