As you know, creating a well-rounded estate plan is imperative. Doing so can help ensure that your assets are inherited and distributed according to your wishes after you pass away. While most people know about wills, many people have only heard about trusts, and are perhaps unsure about which type of trust is best to include in their estate plan. Essentially, a trust is a document that is a contract between the trustor and the trustee. The trustor, the person who creates the trust, essentially gives the third-party, the trustee, the right to manage assets held in the trust on behalf of the trustor’s beneficiaries. There are several types of trusts available to individuals in Pennsylvania, which is why you should read on and reach out to our experienced Pennsylvania estate planning attorneys to learn more about which type is best for you.
- Revocable Trusts: Revocable trusts are very common, and for good reason. When someone creates a revocable trust, they will place their assets in the trust, though they still retain the ability to modify or terminate the trust, as long as they have the mental capacity to do so on their own.
- Irrevocable Trusts: Irrevocable trusts are almost as common as revocable trusts, however, when the trustor creates an irrevocable trust, he or she essentially relinquishes his or her rights to the assets placed in the trust upon creation, making it impossible to modify or terminate the trust at a later date.
- Life Insurance Trusts: These trusts are ideal for those who are seeking to remove their life insurance plans from their estate. The benefit of doing so is that once you do, your beneficiaries will not have to pay taxes on your life insurance policy upon your passing.
- Charitable Trusts: If you are an individual who wishes to donate or contribute to certain charitable organizations upon your passing, you should strongly consider creating a charitable trust. This will allow you to donate certain assets to these organizations, even if you did not have the resources to do so in your lifetime.
- Marital Trusts: Marital trusts are primarily for surviving spouses. In these trusts, the surviving spouse will receive assets placed in the trust upon the other spouse’s passing. However, 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.
If you have any additional questions, or you would like to get started, please do not hesitate to give us a call today.
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