“Trust” in your Estate Plan
Revocable Living Trusts are the subject of a lot of online marketing. These types of trusts are seeing a resurgence in popularity across the country. But what does that mean for your Estate Plan? Is a Revocable Living Trust right for you? There is a good chance that the materials you are viewing, reading, and listening to are not even set in Pennsylvania.
So, what does a Revocable Living Trust actually do, and who needs one? A Revocable Living Trust is an estate planning mechanism that compiles and “holds” all of your assets while you are still living. There is no change in tax status while you are living, as it is simply a re-titling of assets. Your Revocable Living Trust can be amended or terminated at any time while you are alive and have capacity. It provides for the disposition of assets while you are alive, as well as the disposition of assets upon/after your death. It names a Trustee, which is typically you, for your lifetime, and then at least one Successor Trustee, who will administer the Trust upon your resignation, incapacity, or death. It is typically accompanied by a “Pourover Will” which will provide that any of your assets not titled in the name of the Trust be added to the trust after your death.
Revocable Living Trusts are not necessary for most Pennsylvanians. The Trust administration process very closely mirrors the probate process, so there is not much difference in the time and expense necessary to complete the administration process. Revocable Living Trusts do not offer any liability or creditor protection during your lifetime. They do not avoid Pennsylvania Inheritance Tax. They do not become irrevocable until your death, and therefore, do not receive a Tax ID Number or file separate tax returns during your lifetime.
Who should consider a Revocable Living Trust?
- Pennsylvanians who also own property (or plan to own property) in another State
- Couples with Blended Families may benefit from a Revocable Living Trust
- Individuals who have fiduciaries living in another State or Country
- Individuals whose total Estate Value may exceed the Federal Estate Tax threshold
Make sure that you understand the type of Trust you are forming, and what that Trust will and will not accomplish for you. The experienced Estate Planning Team at Covelli & Piscione Law Offices, P.C. can assist you in understanding the best, and most cost-effective way to accomplish your goals. And with a free, 30 minute initial consultation, there’s never been a better time to ask!
