When it comes to estate planning, there are a number of different documents you can create. For example, many people choose to create trusts. A trust is essentially a contract between the estate and a trustee. A trustee is an individual who takes care of the trust for the person who benefits from it, who is known as a beneficiary. With this contract, the trustee is able to hold the assets on behalf of the beneficiary. Read on to learn more about trusts in Pennsylvania and whether you can modify/ terminate them.
What Types of Trusts are Available in Pennsylvania?
Everyone’s situation is different. As a result, there are different types of trusts available. Some of the most common trusts available in Pennsylvania include:
- Revocable Trusts: These are perhaps the most common type of trust. Essentially, a revocable trust is one that the trustor places his or her assets in and can modify or terminate the trust whenever he or she wishes, as long as he or she is not incapacitated.
- Irrevocable Trusts: These trusts require the trustor to give up his or her rights to the assets he or she places in the trust upon creation, thereby relinquishing their right to terminate or modify the trust’s terms.
- Charitable Trusts: These are fantastic trusts for those who wish to donate or contribute to certain charitable organizations upon their passing, especially if they did not have the financial means to do so in their lifetime. The two main types of charitable trusts are charitable leads trusts and charitable remainder trusts. Essentially, in a charitable leads trust, trustors may choose the charity they wish to receive interest from their gift for a designated timeframe, while in a charitable remainder trust, charities can receive all assets when the trust term ends, though until the term ends, the donor will receive the interest.
Can I Modify or Terminate a Trust?
Your life will change over the years. As a result, a trust you created at one point in time may no longer work. In this case, you may wish to modify, or even terminate the trust. Your ability to do this will depend upon the type of trust you have created. For example, a revocable trust can be easily modified or terminated with the help of an estate planning attorney. But, an irrevocable trust cannot be modified or terminated without the permission of the beneficiary.
If you are interested in modifying or terminating a trust, our firm is here to help. Reach out today to discuss your options.
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