The unique ownership attributes of community property results in a tax advantage for couples living in community property states after one of them passes away.  Specifically, 100% of any property that is community property will generally receive a new “basis” - or tax cost - for income tax purposes.   In non community property states, only the property owned in the name of the deceased spouse or 50% of jointly owned property will get this “step up” in basis.  For couples living in a community property state, creating individual Trusts could result in losing this tax advantage, whereas a Joint Trust should preserve it.

In addition, a Joint Trust reflects the joint ownership and management of community assets that applies to most couples living in community property states.

Did this answer your question?