If we’re a married couple, do we need separate trusts or can we do a joint trust? – North Carolina

Short Answer

In North Carolina, a married couple can use either one joint trust or two separate trusts. A joint trust is often simpler to manage while both spouses are alive, but separate trusts can make it easier to keep certain assets and decision-making separate. The better choice usually turns on how assets are owned (including any home owned as tenants by the entirety), whether either spouse has children from another relationship, and how much flexibility each spouse wants to keep.

Understanding the Problem

Under North Carolina estate planning, the decision is whether a married couple can place assets into one shared trust and manage it together, or whether each spouse must create an individual trust. The key issue is who has the power to change the plan, control the trust property during life, and what happens at the first spouse’s death. The practical concern is whether a joint structure creates unwanted shared control over property that one spouse would prefer to keep separate.

Apply the Law

North Carolina generally allows spouses to create a “joint trust,” meaning both spouses serve as the trust makers (settlors). Spouses can also create “separate trusts,” where each spouse is the settlor of their own trust. The trust document controls who can amend or revoke the trust during life and how the trust is administered at incapacity or death. For married couples who own a home as tenants by the entirety, North Carolina has a specific statute explaining what happens if that real property is deeded into a joint trust (or into equal shares to two separate trusts) and when creditor protections similar to tenancy by the entirety can still apply while both spouses are living and remain beneficiaries.

Key Requirements

Clear trust structure and control: The document should spell out whether decisions require both spouses, whether either spouse can act alone, and who can amend or revoke the trust.
Correct funding and titling: Assets must be retitled into the trust (or made payable to it) in a way that matches the plan, especially for real estate and jointly owned accounts.
Plan for the first death: The trust should state what becomes irrevocable at the first spouse’s death, what remains under the survivor’s control, and who manages the trust going forward.

What the Statutes Say

N.C. Gen. Stat. § 41-65 (Entireties property conveyed to trusts) – Explains how real property owned by spouses as tenants by the entirety can be conveyed into a joint trust (or split equally into two separate trusts) and when protections similar to tenancy by the entirety can still apply while the spouses remain married and both are current beneficiaries.
N.C. Gen. Stat. § 39-6.7 (Construction of conveyances to or by trusts) – Provides that transfers “to a trust” are treated as transfers to the trustee(s), which helps with how deeds and other transfer documents are interpreted.
N.C. Gen. Stat. § 30-3.4 (Elective share procedure; time limit) – Sets a six-month deadline (after letters are issued) for a surviving spouse to file an elective share petition with the clerk of superior court, which can matter if a plan leaves too little to a surviving spouse.

Analysis

Apply the Rule to the Facts: No specific facts were provided, so two neutral examples help illustrate the choice. If both spouses want one combined plan, share the same beneficiaries, and plan to act together as co-trustees, a joint trust can work well. If either spouse wants to keep tighter control over separate property, protect children from a prior relationship, or avoid having the other spouse able to change the disposition of certain assets, separate trusts are often the cleaner structure.

Process & Timing

Who creates and signs: both spouses for a joint trust (or each spouse for separate trusts). Where: outside of court; then assets are retitled through the appropriate office or institution (for real estate, typically recording a deed with the county register of deeds). What: trust agreement and funding documents (such as deeds and account retitling forms).
Fund the trust: move selected assets into the trust. For a home owned as tenants by the entirety, decide whether to deed it into a joint trust or into equal shares to two separate trusts and draft the deed language to match that plan.
At the first death: follow the trust’s instructions for administration and any split into shares/subtrusts, and update beneficiary designations and titles that still name the deceased spouse.

Exceptions & Pitfalls

Tenancy by the entirety issues: Deeding entireties real estate into a trust changes how the property is held; creditor protection and control can depend on whether both spouses remain married, the property stays in the trust, and both remain current beneficiaries.
Unequal contributions and “whose asset is it” confusion: A joint trust can blur the line between each spouse’s separate property and jointly owned property if the trust and funding are not drafted carefully.
Blended families: Separate trusts often reduce conflict where spouses have different beneficiaries; a joint trust can still work, but the drafting must clearly define what becomes irrevocable at the first death.
Unfunded trust problem: Creating the trust but failing to retitle major assets (especially real estate and accounts) can leave the estate in probate and defeat the purpose of the plan.
Elective share risk: Even well-meaning plans can create elective share exposure if they effectively disinherit a spouse; the procedure runs through the clerk of superior court and has short deadlines.

Conclusion

In North Carolina, married couples can choose either one joint trust or two separate trusts, and the trust document plus asset titling controls how the plan works. A joint trust is often simpler, but separate trusts can better preserve each spouse’s control and keep assets and beneficiaries clearly separated. A practical next step is to inventory how major assets are titled (especially any home held as tenants by the entirety) and then draft and fund the trust(s) to match that ownership and the desired plan.

Talk to a Estate Planning Attorney

If you’re dealing with the decision between a joint trust and separate trusts in North Carolina, our firm has experienced attorneys who can help explain the tradeoffs, confirm how assets are titled, and map out an administration plan for incapacity and the first spouse’s death. Call us today at (919) 341-7055.

Disclaimer: This article provides general information about North Carolina law based on the single question stated above. It is not legal advice for your specific situation and does not create an attorney-client relationship. Laws, procedures, and local practice can change and may vary by county. If you have a deadline, act promptly and speak with a licensed North Carolina attorney.