Pennsylvania trusts are a helpful part of an estate plan and can be used to manage assets during life or can complement a will as part of an overall estate plan. They can be, however, little understood or misunderstood which is why it is worth it for estate planners to take a closer look and ensure their questions concerning trusts are answered.
Trusts are used to manage the distribution of property by transferring the benefits and obligations of the property to different individuals. The creation of a trust is a fairly straightforward and basic process. The owner of the property transfers legal ownership of the property to an owner or institution, referred to as the trustee, to manage the property for the benefit of another party, referred to as the beneficiary. The trustee has a legal fiduciary duty to manage the property in the best interests of the beneficiary.
One important aspect of a trust to be familiar with is that it must be funded. The party creating the trust, referred to as the grantor, must transfer the property into the trust during the trust creation process for the trust to be valid. There are two broad categories of types of trusts, including living trusts and testamentary trusts. A variety of different types of trusts fall into those two broad categories and estate planners should be familiar with each to determine which is the best option for them.
When estate planning, estate planners should always consider the different trust options and which is best for their needs, goals and wishes. Estate planning tools provide a variety of different options, so that estate planners can develop the estate plan that is best for them and achieves the distribution of property they are seeking.