Mark J. Kohler explains whether married couples need one or two revocable living trusts for an LLC. A joint trust treats the LLC as marital property with automatic inheritance, while separate trusts keep assets distinct, which works better for second marriages or prenups. Most of his clients choose the joint trust unless circumstances require otherwise.
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You have an LLC with your spouse. Do you need two trusts, one for each or will one living trust for both with the LLC documented in it?
Okay, this is a great question. I'm killing trees here. Julie.
I love it. Julie has a spouse. Now, some of you are single, so
you're going to have one trust.
That's easy. But if you're married, you really have two options. You could have one joint revocable living trust. And percent of my clients, we do a joint revocable living trust and then
the Trust owns the LLC 100%, so it's still marital property. And if you die, your surviving spouse takes over if you both die. We already talked about that.
So the LLC is owned by the trust. It's non taxable transfer. It all works. Easy, schmeezy.
The LLC owns the property.
Now, the other option is sometimes I'll do a trust for the husband and a trust for the wife, and then we tie the two together with kind of some provisions.
Now, some of you may say, mark,
why would you do this? Well, it's oftentimes because it's a second marriage, so there might be a sort
of a prenup involved. So these assets are husband's assets. These assets are wife's assets.
Oh, oh, and then we had kids together. So now we got his, hers and ours.
So Steve Martin, Helen hunt, you know,
12 dozen, whatever that was. No, cheaper by the dozen.
Oh, they didn't get remarried. And cheaper by the dozen. I'm thinking of the wrong movie.
Anyway, his, hers and ours, we're going
to have maybe a provision for our
children, but we have separate trusts.
Sometimes it's good for asset protection.
I'll have one spouse that's maybe a surgeon or a doctor or a lawyer. Husband, husband or wife.
And we want to keep some assets
separate from the other spouse. Again, maybe it's a second marriage or there's some asset protection reasons, but I
