Growing old is an inevitability for all people. A number of residents in Chester, Pennsylvania, particularly those with small businesses, have considered this fact and drafted an estate plan. Some of those estate plans make use of a trust to ensure that all of the person’s possessions will not go to waste.
A trust is an estate plan tool that is often used to transfer and manage property. A person who formulates a trust, or a settler, is not required to give away all the power over the property. The settlor is also not obligated to surrender the income generated by the assets in the trust. Trusts can be revocable. That means that the settlor may choose to terminate the trust at any time. Irrevocable trusts, on the other hand, may end only with a specified event, like the death of a trust beneficiary.
An advantage of a trust is that the authority to maneuver business assets can be assigned to a trustee until the heirs come of age. Another advantage is that it gives the descendents and their heirs more privacy than a will. Wills are often settled in court, which is a public procedure. In the event that the will includes a detailed list of a person’s assets and the manner in which they will be distributed, the details may become a subject of public record. For many people with a small business, this could lead to a loss of customers or it could even lower the value of the business.
To keep these matters private, residents of Chester, Pennsylvania, especially small business owners, can have a pour-over will included in their estate plan. This simply states that all of the person’s assets, as well as the ownership interest in the business, are to be handed out to a trust upon their death. Subsequently, the assets will be transferred accordingly to the trust agreement, which is a private document and does not require a court filing to be valid.
To learn more about trusts, a resident of Chester, Pennsylvania, may wish to consult a legal professional. The legal professional may provide comprehensive details regarding the proper drafting of trusts, as well as other estate planning tools for a hassle-free distribution of assets.
Source: Business2community.com, “Estate Planning for Small Business Owners,” H. Lee Thompson, Aug. 12, 2013