Many people choose to make a trust part of their estate plan in order to preserve assets and carry out their wishes. One reason trusts are so valuable is that they can be adapted to a wide variety of goals and situations.
For many people, the most valuable quality of a trust is that it can allow their assets to avoid probate and go directly to their loved ones.
What is probate?
Probate is the legal process in which a deceased person’s assets are catalogued and distributed to their heirs. If the person left a valid will, this speeds up part of the process, but it doesn’t avoid it altogether.
The process can be time-consuming and sometimes expensive. It can also
What is a living trust?
When you put assets into a trust, you appoint a trustee to manage the assets for the benefit of the parties you name as beneficiaries. The trustee may pay out the assets to the trustees on a quarterly basis, once a year, or according to some other conditions in the terms of your trust.
In this sense, you can use a trust to accomplish some of the same things you might want to do with a will. Unlike a will however, a trust can go into effect during your lifetime.
When you set up a so-called living will, you can even name yourself as the trustee and a beneficiary. In this way, you manage the assets for yourself as you need them. You can also name a successor trustee and successor beneficiaries. This means that when you die, a new trustee takes over managing the assets in the trust for the benefit of your heirs.
This arrangement means the assets are not considered part of your estate after you die, and therefore don’t have to go through the probate process. This makes things easier for your heirs in many ways. And, since the assets in the trust don’t face federal estate taxes or Pennsylvania inheritance taxes, it can also mean more money for your heirs.
