Before anyone passes on, it is their duty to create a comprehensive estate plan so that they and their families can have peace of mind. That being said, while you most likely have heard of, or even written, your will, you may not have yet established a trust in your estate plan. Trusts are among the most important estate planning documents, however, there are many different types of trusts available to individuals throughout the state of Pennsylvania. At its most basic, trusts are contracts between a trustor and a trustee. The trustor is the individual who creates the trust, and the trustee is a third party whose job is to manage assets placed in the trust for beneficiaries of the trustor. In most cases, once the trustor passes away, the beneficiary will receive those assets. Please continue reading and speak with our experienced Pennsylvania estate planning attorneys to learn more about the various types of trusts and which one may be best for your specific situation. 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.
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