A trust is a fiduciary arrangement in which a trustee holds assets on behalf of a beneficiary or beneficiaries. Trusts can specify how and when assets should be passed to beneficiaries. When a person has a trust, they may be able to avoid the probate process when the time comes to distribute assets. This can save a family time, money, court fees. In some cases, it can even potentially reduce estate taxes. If you are considering creating a trust, it is important to consult with our experienced trust attorneys. The estate team at Friedman Schuman has over 40 years of experience guiding clients through matters related to trusts. If you need quality legal assistance, contact our firm today.
What are the benefits of creating a trust?
Trusts can be beneficial for many different reasons. Trusts can be used to control distributions to beneficiaries. They can also be used for tax planning or probate purposes. The terms of the trust will depend on the purpose for which it is being created.
What are the different kinds of trusts?
Trusts fall into two different categories. First, there is an inter vivos trust. An inter vivos trust is a trust that, when created, is fully operational. This type of trust is typically funded throughout the donor’s lifetime. The second category of trust is a testamentary trust. This category of trust is usually established after the donor’s death and is typically in accordance with the decedent’s Will. The two most common types of trusts are:
- Irrevocable trusts: An irrevocable trust is a trust that is created during the life of a donor and cannot be changed or amended. Any assets in the trust can only be distributed by the trustee as indicated by the terms of the trust instrument. Irrevocable trusts are commonly used for federal estate tax planning and/or Medicaid planning.
- Revocable trusts: Commonly referred to as inter vivos or living trust, a revocable trust is created during a donor’s lifetime which can be amended or revoked at the donor’s discretion. A revocable trust can be an attractive option to a donor because he or she can enjoy the benefits of the trust arrangement while still maintaining control over the assets in the trust.
Furthermore, there are numerous trusts within these categories that each come with a specific purpose. Some of the many examples of trusts include bypass trusts, charitable trusts, charitable lead trusts, charitable remainder trusts, credit shelter trusts, grantor trusts, marital trusts, and special needs trusts, just to name a few.
Contact a Montgomery County trust attorneys
Deciding which trust is best for you is a personal decision. It can also be highly dependent on your financial situation. Regardless of the assets you may have, consulting with an attorney about the financial future of you and your loved ones can help ease your mind. The trust attorneys Friedman Schuman provides legal services to clients in Pennsylvania for all their estate planning and administration needs. If you require an experienced legal team to guide you through creating a trust, contact Friedman Schuman to schedule a consultation.