Dying Too Young or Living Too Long
One of the most valuable management tools for flexible and effective Estate Planning is the Revocable Inter-Vivos Trust, more commonly known as the Living Trust.
Young adults with children are faced with the problems of what happens to their sons and daughters if they die too soon. Often the family assets are modest but there are large life insurance policies that have been purchased for the children's benefit. The problem is that minor children cannot inherit the proceeds. If they are named as beneficiaries the Courts will intervene and set the funds aside in special accounts during their minority. Guardians will need Court approval for each expenditure they seek to make for the children. A Living Trust has YOUR specific instructions on how you want your children raised. A professional trustee can manage large sums of money and make distributions to the Guardians without Court approval.
For those of us fortunate to live to our golden years, the Living Trust provides a superb management tool to place out assets under one umbrella. We name a Successor Trustee to manage the Trust in the event we become incapacitated or upon our death. In this way we avoid the pain of forcing our loved ones to have us declared legally incapacitated and placed under a court appointed Guardianship.
An Effective Tax Planning Tool
Today we live with uncertainty due to the “sunset” provisions of the Tax Reduction Act of 2001. We do not know if the Federal Estate Tax will revert to it's pre-2001 levels, as will be the case if the present law simply expires, or if the Federal Estate tax will be modified significantly. Your Living Trust can be drafted with various forms of disclaimer provisions that can provide total flexibility for the Trust to stay current with changing tax laws.
Avoidance of Probate
Despite what you may have heard, the Probate process in Pennsylvania is not complex or burdensome. However, if you own assets in other states, the use of a Living Trust can eliminate the need and expense of ancillary probate in those other states. No need to do complex filings or retain attorneys in those other states.
Who's the Trustee?
While you are alive and well, YOU can be the Trustee of your Living Trust. You can name one or more individuals, a bank, or a combination of individuals and a bank, to act as Trustee if you become incapacitated or to serve after your death.
Learn how this valuable and versatile Estate Planning technique can benefit you and your family.
