Arizona law does not require you to be married to set up a joint trust. Domestic partners, parent-child pairs, siblings, and any two people who share property can use a joint trust. Estate planning for unmarried couples takes extra care, but a joint trust works well when set up the right way.
How a Joint Trust Works for Unmarried People
A joint trust is a single trust paper made by two people, called co-trustors. Both move their assets into the trust. Both typically serve as co-trustees during their lifetimes. The trust spells out three things:
- While both are alive: Both co-trustors manage the assets and can use them as needed
- When one partner dies: The trust says how the deceased person's share is handled. It might go to the other co-trustor, to named heirs, or stay in trust with limits.
- After both pass: The remaining assets go to the final heirs
Common Situations for Unmarried Joint Trusts
A joint trust makes sense in several cases:
- Domestic partners who own a home together and want joint ownership safety. If one partner dies, the other can stay in the home without going through the probate process.
- A parent and adult child who share a home and want unified management if one cannot make choices
- Siblings who inherited a family home together and want a clear plan for what comes next
Why Unmarried Couples Need Extra Planning
Married couples have built-in legal safety. A surviving spouse has automatic inheritance rights under Arizona law. Unmarried partners have none. If one partner dies without a plan, the other gets nothing under Arizona's default rules. Everything goes to blood relatives.
This makes a trust vital for unmarried couples. Without one, a long-term partner could lose their home, shared savings, and any claim to assets they helped build.
Beyond the trust, unmarried couples should also think about:
- Power of attorney: This lets your partner make financial and medical choices for you if you cannot. Without one, your partner has no legal power to act for you.
- Life insurance: A policy naming your partner as the person who gets the payout gives them fast financial support if you pass away. It can cover mortgage payments, living costs, or final bills.
- Beneficiary names: Retirement accounts, bank accounts, and investment accounts pass by named beneficiary. Make sure these match your trust.
Joint Trust vs. Separate Trusts
Unmarried co-owners can also set up separate trusts instead. Here is how they compare:
- Joint trust: One document. Shared management. Simpler for jointly owned property. Lower upfront cost since you only make one trust.
- Separate trusts: Each person has their own trust for their own assets. More freedom if things change. Clearer line between each person's property.
A joint trust works best when both people are committed and their assets are mixed together. Separate trusts work better when each person has major separate assets or the bond may change.
Tax Differences for Unmarried Couples
Married couples get a full stepped-up basis on community property when one spouse dies. Unmarried couples do not get this benefit. Only the deceased person's share gets a step-up. The surviving partner's share keeps the old basis.
This means capital gains taxes can be higher for unmarried couples when property is sold. An estate planning lawyer can help set up the trust to lower this impact.
What to Do Next
If you share property or finances with someone you are not married to, a trust is one of the most key steps you can take. Without one, you have no legal safety net.
An estate planning attorney can help you decide whether a joint trust or separate trusts fit better. Either way, the goal is the same: making sure the people you care about are safe.