Developing one or more revocable trusts for a married couple depends on the character of the property they own, i.e., all community property, some community and some separate property, or only separate property. In addition, the amount of community and separate property may also play a role in determining the most efficient structure for the couple.
All Community Property
Where a couple can appropriately characterize all of their assets as community property, estate planning lawyers typically create a single revocable trust for both spouses. Generally in this situation, a couples' wishes as to how the community property should be distributed after one and eventually both spouses pass away is fairly consistent. A single revocable trust is generally more cost effective as the estate planning lawyer only has one trust document to produce.
Some Community and Some Separate Property
Where a couple has some community property and some separate property, whether a single revocable trust or multiple revocable trusts is preferred may turn on the relative values of each type of property. If either or each spouse only has a relatively small amount of separate property, a single revocable trust with provisions taking into consideration the separate property may be appropriate, as the cost of creating a separate revocable trust to deal with one spouse's separate property may not be justified.
However, if one spouse owns a substantial amount of separate property, he or she may wish to create a separate revocable trust to hold those assets and prevent the likelihood of commingling those separate assets with community assets, which would be held in a community property trust. It can also help with housekeeping to ensure that both spouses have clarity on which assets are community and which are separate.
Only Separate Property
If a couple has entered into an agreement where they agreed that there is no community property between them, for example, by virtue of a premarital or postnuptial agreement, then having separate trusts to hold each spouse's separate property will likely be the most sensible approach.
Although general guidelines can be prescribed, speaking with a qualified estate planning professional is an important step, especially for those who own substantial amounts of separate property. There may also be tax considerations that may cause you to re-characterize property as either separate or community property.