Most people think that their will is what passes on their assets and possessions to their loved ones, but what they don’t realize is that wills don’t guarantee you immunity from the probate process. On the other hand, a trust is a special unique arrangement that allows your estate to avoid the probate process and still pass on your assets as you wish. Trusts can be remarkably powerful tools when it comes to creating your estate plan, which means you should consult with a Philadelphia estate planning lawyer in order to make the best use of them.
Chestnut Hill Legal is dedicated to helping you create the estate plan that meets your needs and prepares your estate and your loved ones for the future. Our Philadelphia trust attorney wants nothing more than to help you reach your successful outcome, and we offer individually-tailored and experienced legal advice that’s customized to your exact wishes. We have a thorough and in-depth familiarity with the laws regarding probate and estate planning matters, and we’re committed to putting the law to work to protect you, your assets, and the future of your loved ones to the best possible extent.
To put it simply, a trust is an agreement between three parties: the trustor, the trustee, and the beneficiary. The trustor is the person who creates the trust and who places their assets into the trust as part of the agreement. The trustee is the person who oversees the trust and who manages the property that has been transferred to and titled to the trust. The beneficiary is the person who receives the benefits of the trust when the conditions have been met.
There are many different kinds of trusts, including:
Revocable living trusts: A trust that goes into effect during the trustor’s lifetime. In these trusts, one person often performs the role of all three parties in a trust, but will often name additional beneficiaries who will benefit from the trust after the trustor’s passing.
Irrevocable living trusts: In these trusts, the trustor can’t also act as the trustee and instead is essentially giving up control over these assets until their passing. Essentially, these are used to remove the value of the assets placed in this trust out of the estate for tax burden purposes.
Special needs trusts: These are trusts designed to provide benefits to a beneficiary who is disabled so as to not compromise their eligibility for Social Security or Medicaid.
Chestnut Hill Legal can help you create any of these types of trusts and arrange for which assets should be passed to them and how they will be distributed. With our dedicated trust attorney in Philadelphia on your side, you can have the peace of mind of knowing your future and the future of your loved ones is in good hands.
With a revocable trust, you can transfer ownership of your assets to the trust during your life. When you die, those assets are not part of your probate estate because technically they are owned by the trust, not you personally. Even so, you can do whatever you want with your trust assets during your life, just as if you owned them personally because you are both trustee (the person administering the trust) and the beneficiary (the person who benefits from the trust assets). Probate is a costly, complex and sometimes difficult court process by which title to your property changes to its new owner.
With a will alone, you control what happens to your assets upon your death. However, you can't attach any "strings" to the distribution of that property. For example, if your child is 20 years old at the time of your death, and you leave a sizable portion of your estate to that child, you cannot direct the assets be held until he or she becomes older. With a trust, you can specify conditions upon the receipt of trust property, such as age or marital status of the beneficiaries.
Irrevocable trusts are trusts that cannot be modified or revoked during the lifetime of the settlor (the person who funds the trust - likely you). If the value of your estate is greater than the federal estate tax exemption amount ($5.49 million in 2017), irrevocable trusts are useful in helping to bring down the value of your taxable estate. They can own life insurance policies (irrevocable life insurance trust, or ILIT), be used for charitable gifts (charitable remainder or lead trust), or leave assets to grandchildren (generation skipping trust). Each of these reduces or eliminates potential federal estate and/or generation skipping transfer taxes.
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A living trust offers various benefits to the trustor. They include the following:
- Avoid the cost of probate
Our Philadelphia trust lawyers at Chestnut Hill Legal are here to guide you through the process when you decide to create a living trust. Call us today to discuss your options.
If you have children and/or assets estate planning is beneficial. An estate plan ensures that nothing is left to chance and your future is prepared for. Estate planning includes a variety of documents, two of which are a will and a trust. There are fundamental differences between the two, the first being: a will is a document that includes instructions on how you would like your assets to be distributed. A trust protects your assets after you pass by appointing a person to take care of them. A will is required to be submitted to the probate court, but a trust allows you to avoid that.
The information on this website is for general information purposes only. Nothing on this site should be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or viewing does not constitute, an attorney-client relationship.
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