Essentially, a trust is a contract between your estate and the trustee you, the trustor, will appoint. When you do so, the trustee will manage the trust on behalf of the beneficiary of the trust. Trusts will often bypass the probate process, and they frequently help families save on taxes, which, in turn, maximizes the inheritance beneficiaries may receive. Read on to learn more about trusts and modifying/terminating them.
What Types of Trusts are Available in Pennsylvania?
Some of the different types of trusts available in Pennsylvania are as follows:
- Revocable Trusts: These are among the most common types of trusts. Essentially, a revocable trust is when an individual places his or her assets in the trust while still having legal authority to modify or terminate the trust, as long as they remain mentally capable of doing so.
- Irrevocable Trusts: In irrevocable trusts, individuals place their assets in the trusts and relinquish their right to manage or terminate the trust.
- Marital Trusts: Marital trusts are for surviving spouses. When you create a marital trust, you will help ensure that your spouse will receive the assets you placed in the trust upon your passing. Additionally, assets placed in these trusts can also be used for the spouse’s benefit with the Federal Estate Tax or Federal Gift Tax deferred until their death.
- Charitable Trusts: These types of trusts are ideal for those who would have liked to donate to certain charitable organizations while alive, though they did not have the financial means to do so. If you would like to donate to a charitable organization upon passing, you may wish to create a charitable trust.
- Life Insurance Trusts: If you are someone who is looking to remove your life insurance plan from your estate so your beneficiaries will not have to pay taxes on that policy upon your passing, you should strongly consider creating a life insurance trust.
Modifying or Terminating a Trust
Our circumstances change greatly over the course of our lives. As a result, you may wish to modify or even terminate a trust you have created. Whether you can alter your trust will depend upon the type of trust you have created. For example, it is much easier to modify a revocable trust than an irrevocable trust. Before taking action, you should reach out to an experienced estate planning attorney.
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Whether you are dealing with matters involving estate planning, estate administration, or elder law, you need a legal team that you can feel confident will represent your best interests, every step of the way. We are that legal team. Contact Heritage Elder Law & Estate Planning today so we can get started.