Note that wills take effect upon death, while trusts may be used both during life and after the death of their creators. Whether separate or together, wills and trusts can provide effective estate planning. Continue reading and give our experienced Pennsylvania estate planning attorneys. Below are some questions you may have:
How is a will used in Pennsylvania?
A will is a document that controls the distribution of your assets after your death to your appointed heirs and beneficiaries. It also can include instructions for matters that need conclusions after your death, like the selection of an executor of the will and guardians for minor children, or guidance for your funeral and burial. A will can mandate an executor to craft a trust and appoint a trustee to hold assets for the benefit of certain individuals, for example, for minor children until they reach maturity or a specified age.
It is instructed by state law that a will is signed and witnessed. Its execution demands a legal process. It must be filed with the probate court in your jurisdiction and carried out by your designated executor. The document is publicly known in the records of the probate court which oversees its execution and has jurisdiction over any conflicts.
What are trusts?
Trusts are legal contracts that provide the transfer of assets from their owner, referred to as the grantor or trustor, to a trustee. They set the terms for the trustee’s management of the assets, for distributions to one or more established beneficiaries, and for the highest disposition of the assets. The trustee is a fiduciary obliged to control the trust assets in conformity with the terms of the trust document with the best interests of the beneficiaries in mind.
Dissimilar to wills, which take effect upon death, trusts become valid when the assets are transferred. A “living trust” can be achieved during a grantor’s lifetime. Or a trust may be a “testamentary trust” made after death in agreement with directives in the decedent-grantor’s will. Trusts are frequently used in estate planning to aid and provide for the distribution of assets to the heirs of the grantor.
Is a will or trust better?
You will want to acknowledge that selecting a trust or a will relies on the family and financial situation. In most instances, wills are less pricey to write and easier to manage, even though they can be challenged in probate court. Wealthy individuals seeking to avoid probate and reduce estate tax exposure could be better off with an irrevocable trust. An irrevocable trust basically transfers assets out of one’s name, however, these are more expensive to draw up and implement, require naming a trustee, and cannot be modified after going into effect.
