The thought of dying and leaving property and assets behind is why some residents in Kennett Square, Pennsylvania, consider using estate planning tools, such as trust. Readers need to understand that without a trust and other estate planning tools, their property and assets will likely end in probate, which could take substantial time before heirs or beneficiaries can claim their fair share of the stake. One good reason that could convince people to create a trust is it can reduce taxes.
Some people create a living trust to reduce tax when transferring property. According to a recent report, State Rep. Brandon Neuman said that he is drafting legislation that would allow trustees to transfer property and assets, under living trusts, to the heirs without penalties. According to the legislator, the living trust is a great substitute for a will, allowing families to transfer property without paying the 1 percent realty transfer tax. Neuman added that the living trust should not be revocable in order for it to be considered similar to a will for tax purposes.
The new legislation, if approved, will be beneficial for heirs and beneficiaries. But, before that, grantors have time to review their trusts and update it, ensuring a smooth transition. In creating a trust, grantors will have to designate a trustee who will handle the property and assets until such time that the heirs have met the conditions indicated on the will.
People who are having issues with trust administration may wish to get more information. By doing so, a Pennsylvania resident will have better understanding on trust issues and avoid costly mistakes.
Source: Observer-reporter.com, "Neuman drafting legislation on living trusts," Jan. 17, 2014