Can You Combine Trusts?

A trust fund is an account managed by a qualified adviser, termed the trustee, who manages the funds for the benefit of the beneficiaries. Combining trusts so they are managed as one fund is not always practical, as the terms of trusts can differ greatly. However, in some cases combining trusts benefits both the beneficiaries and the trustee. In fact, two or more trusts can be combined into one.

Legal Rights

A trustee who manages more than one trust can combine them as long as the law does not prohibit her from doing so. The Uniform Trust Code typically allows this practice, as long as it does not conflict with the grantor's wishes, beneficiaries' rights or performance of the trusts. A trustee who does not have explicit permission to combine trusts can negotiate permission with the grantors, or go to court to get permission. The grantor, the individual who authorizes and funds a trust, can combine trusts as well. So can beneficiaries who have gained control of their trusts.

Pros and Cons of Combining

Family members sometimes decide to combine their trusts to make management of their trusts more efficient. In doing so, they reduce any trustee fees or reduce the burden on a volunteer trustee. Likewise, a trustee might opt to combine trusts to streamline the management process. People set up trusts to ensure their money is managed wisely, provide for their children's futures and take advantage of tax savings. Combining trusts can offer tax advantages and aid in management of the funds, accomplishing the grantors' goals. However, if the trust terms are too different, combining may be difficult. For example, if the beneficiaries of one trust will soon be entitled to receive the funds, while the beneficiaries of the other trust won't start receiving funds for many years, merging the funds may not work.

What Combining Involves

Spouses who each have a trust with the same beneficiaries -- normally, each other or their children -- should usually combine their trusts, as Karen Ann Rolcik says in "The Living Trust Kit." Trusts with similar terms and the same beneficiaries are easier to combine. However, the funds from different trusts intended for different beneficiaries can be designated to different beneficiaries even though the trusts are managed as one. The trustee simply consolidates the funds, invests them, and tracks how much each fund has earned. A trustee or qualified attorney who specializes in trusts can advise you on whether you and your beneficiaries will benefit from combining your trusts.


A trustee who combines trusts must be extremely conscientious about record keeping. Otherwise, he could be accused of stealing money or distributing it improperly, warn Eliza Hanks and Carol Elias Zolla in "The Trustee's Legal Companion." A skilled trustee with excellent accounting skills might feel the benefits of combining trusts far outweigh this risk, however. Of course, the trustee should always keep his own property separate from trust funds he manages for other people.