Estate planning is important to protect your family. Much has been said about the consequences of dying without a Will. Estate planning can help to prevent will contests and allow the assets of the decedent to be divided in the manner that the decedent has provided for in the Will. However, many Pittsburgh residents may not be aware that, in addition to preparing a Will, trusts can also be created as part of estate planning.
One such trust is known as a revocable living trust, which is created during your lifetime to hold your assets. It is revocable, which means that it can be cancelled and the assets transferred back to the original owner. The person creating the trust, known as the settlor or grantor, may also be the trustee and the beneficiary. The trustee controls and manages the assets placed in the living trust. The beneficiary benefits from the trust assets and may have access to income and/or principal depending on the trust terms.
One benefit of a revocable trust is that it allows for the naming of a successor trustee. This person can step in and take over managing the trust if the settlor become incapacitated or disabled. When the settlor passes away, the revocable trust automatically becomes an irrevocable one, because changes can no longer be made to it. The successor trustee makes the final payments and distributes the remaining assets pursuant to the instructions in the trust. The trust assets do not pass through probate but are still subject to Pennsylvania inheritance taxes.
There are benefits to creating a revocable trust, but such a trust is not the answer for everyone. An experienced elder law attorney can help Pittsburgh residents determine if a revocable living trust is a good estate planning document for their family situation in addition to a Will.