If you place your assets in a living trust, they’ll be distributed according to your wishes after you pass. A revocable living trust allows for flexibility and control, making it a widely favored option. Keep reading to learn more about trusts and how to create one.
The Benefit of a Trust
Living Trust
A living trust allows you to be the trustee that manages it, although you have the option to designate someone else if you’d like. Designating yourself as the trustee makes it easy for you to make changes as needed so that you can use the assets in the trust to your benefit during your lifetime.
You’ll also need to designate a successor trustee to take over after your death. This person will distribute the assets to the beneficiaries (the people who get the trust property upon your death) as described in your established terms.
Irrevocable Trust
Once you create an irrevocable trust, it cannot be altered or terminated. A benefit of an irrevocable trust is that it typically can’t be taxed when you die and isn’t easily reached by your creditors.
Dissimilar to a living trust, the assets in an irrevocable trust do not belong to you, which is why they cannot be taxed upon your death.
Probate Court
Both a living trust and an irrevocable trust allow your beneficiaries to avoid probate court, which means the assets should be able to be distributed soon after your passing.
Creating a Trust
Creating a trust can be a relatively simple process, but it does require a bit of planning. Many people find it helpful to consult the assistance of an experienced professional who is trained to handle these sorts of matters.
In order to create a trust, you must prepare a trust document or have one prepared for you according to your wishes, and sign it in front of a notary. The trust won’t be active and finalized until you transfer ownership of your assets into it.
Follow the steps outlined below to develop your trust:
- Decide whether you want an individual or shared trust.
- Choose the property you’d like to include in the trust.
- Determine who will be the successor trustee.
- Identify who will be the beneficiaries of the trust.
- Develop the trust document with assistance from an experienced professional.
- Sign the document with a notary public as a witness.
- Alter the title of the trust property that has a title document—like your house or car—to echo that you’re now the property owner as trustee of the trust.
Once you’ve completed all the aforementioned steps, your trust will be set up and ready to go.
Supporting Your Trust With a Will
Even if you create a living trust, you’ll still need to set up a will to go along with it in your estate plan. Your will helps determine where the property goes that doesn’t make it into your trust.
If you decide not to set up a will, the property that isn’t transferred by your trust or some other method will be provided to your closest relatives, according to Pennsylvania state law. These Pennsylvania laws are referred to as “intestate succession” laws and are designed to protect and provide for your surviving spouse and children.
If you need assistance setting up your trust and/or will, our team here at Legacy Enhancement Trust can help. Our group of professionals is highly experienced in the area of special needs financial planning and has helped many other people just like you with their financial goals. Let us help you with your financial plans, too. Don’t delay—reach out to our office with any questions you may have right away.
Call Legacy Enhancement Trust today at (888) 988-5503 or contact us online to learn how we may assist you!