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When spouses (or anyone else) together create one trust it is called a joint trust. These trusts are common in community property states, but are not widely used in Illinois because of the adverse estate and gift tax consequences that may result. Recently the tax rules have been eased in some private letter rulings and there are also many non-taxable estates so the use of joint trusts is increasing. There are still many technical pitfalls and separate trusts are usually advisable.

These should not be confused with joint wills. When both spouses share one will it is called a joint will. Joint wills, for a variety of reasons, should not be used.

Contact Chicago Estate Planning Lawyer Don Thompson to learn more about joint trusts and joint wills.

Gifts in trust usually do not qualify for the annual gift tax exclusion unless the beneficiary has a right to withdraw the funds. Under Section 1503(c) of the Internal Revenue Code the annual exclusion can be had without withdrawal rights. There must be a single beneficiary. The funds must be available for withdrawal by the child at age 21. The trustee must have unrestricted discretion to distribution principal and income for the benefit of the beneficiary.

If the trust continues after the beneficiary reaches 21, the gift tax annual exclusions are no longer available.

Contact Chicago probate and Estate Planning Lawyer Donald Thompson to learn more:

55. W. Monroe – #3950
Chicago, IL 60603
Phone: 312-782-0844
Fax: 312-201-1436
Email: donthompsonlaw@sbcglobal.net

When spouses (or anyone else) together create one trust it is called a joint trust. These trusts are common in community property states, but are not widely used in Illinois because of the adverse estate and gift tax consequences that may result. Recently the tax rules have been eased in some private letter rulings and there are also many non-taxable estates so the use of joint trusts is increasing. There are still many technical pitfalls and separate trusts are usually advisable.

These should not be confused with joint wills. When both spouses share one will it is called a joint will. Joint wills, for a variety of reasons, should not be used.

Contact estate planning lawyer Don Thompson today. Call 312-782-0844.