When you create a trust fund, it’s imperative to understand the nuances of how these function. For example, you may not know if there’s a limit to how much you can contribute to a fund annually or whether or not these can only be maintained before expiring. As such, it’s important to keep reading to familiarize yourself with these matters. The following blog explores what you should know about how long a trust fund can be maintained and what happens once all the assets are gone. Additionally, you’ll discover how PA trust attorneys can help you plan your estate as effectively as possible to ensure your assets and loved ones are protected.
Is there a limit to how long a trust fund can be maintained?
When you create a trust, understanding the steps involved in the process is essential. Generally, if you create a living trust, it will last the entirety of your lifetime. This is because you are eligible to make changes to a revocable trust over the course of your lifetime as the needs of you and your family change.
When you pass away, a revocable trust will automatically become irrevocable. In many instances, this will only last for another 21 years. This allows you to ensure that minor children who may benefit from the trust can do so as adults.
It’s important to understand that some trusts, based on their structure, can continue for decades. For example, a special needs trust can last longer than 21 years as you’ll need to care for someone with additional needs. Similarly, a dynasty trust will protect your family for generations, meaning it will last longer than the typical 21 years.
What happens to a fund when all the assets are distributed?
When the last assets held in a trust fund are distributed to the beneficiaries, the trust fund will dissipate. Essentially, the trustee will have to sign a dissolution form, legally terminating the trust fund as there is nothing left in it.
In many instances, trust funds will be depleted within the year following your passing. Some do this intentionally so they do not have to pay an annual trustee fee, which can reduce the funds your beneficiaries receive.
If I have questions about my trust, what should I do?
As you can see, there are several important considerations you’ll need to make regarding your trust fund and how long you’d like to maintain it. This can be an incredibly confusing process, and if you’re not careful, it can impact the security of your assets and beneficiaries.
When you need help planning your estate, the team at Friedman Schuman Layser is ready to help. We understand how complex these matters can be which is why our team will do everything possible to assist you. We can help you feel confident that your trust fund will adhere to your needs, ensuring your assets and beneficiaries are protected according to your wishes. Connect with us today to learn how we can guide you through these matters.
