Philadelphia Trust Attorney

Most people think about their last will and testament when they hear the term “estate planning.” However, there are other important tools you can use in this process, including trusts. Trusts come in many forms, but in most cases, they involve transferring ownership of your property to keep it out of probate or to provide financial support for another person.

If you have questions about this estate planning tool, our Philadelphia trust lawyers can help. We have used a range of trusts in estate planning and can create documents that protect your rights. Reach out to Klenk Law today to get started.

What Is a Trust?

A trust is a legal arrangement in which one party (the trustee) holds and manages property for the benefit of another (the beneficiary). The person who creates the trust is known as the grantor. Trusts can be created during the grantor’s lifetime or upon their death, and they can be either revocable or irrevocable, depending on whether the terms can be altered once established.

At its core, a trust is a tool that allows the grantor to decide how and when assets are distributed, managed, and who benefits. Trusts are commonly used for estate planning, but there are different reasons why so many people rely on them. In many cases, they are chosen to avoid probate proceedings or to limit tax liability.

Types of Trusts in Pennsylvania

Pennsylvania law allows for many different types of trusts. Some of the most common options include the following:

Revocable Living Trust

A revocable living trust is created during the grantor’s lifetime. As the name suggests, the grantor has the power to amend it or revoke it at any point. It is not uncommon for the grantor to also serve as the initial trustee and to be the beneficiary as well. Usually, in these cases, language in the trust document will identify new beneficiaries after their death.

Irrevocable Trust

An irrevocable trust, once created, cannot be changed or revoked except in a few limited circumstances. Because the assets are removed from the grantor’s taxable estate, irrevocable trusts can be powerful tools for reducing estate taxes, protecting assets from creditors, or qualifying for Medicaid benefits. They may also be able to avoid probate using this tool.

Testamentary Trust

A testamentary trust is created through a will and takes effect only upon the grantor’s death. They differ from revocable trusts that become active during the grantee’s lifetime. Since it is tied to the will, it must go through probate before becoming active.

Special Needs Trust

This type of trust is designed to benefit individuals with disabilities while preserving their eligibility for needs-based government benefits. A properly drafted special needs trust provides supplemental financial support without disqualifying the beneficiary from the government programs they rely on.

Charitable Trust

A charitable trust allows the grantor to support charitable organizations while receiving certain tax benefits. There are different approaches with charitable trusts, with many grantors funding the trust, which pays any interest earned to the charity before eventually transferring the remainder to the grantee’s heirs.

How to Establish a Trust in Pennsylvania

Setting up a trust is not as simple as filling out a form. Follow these steps to get the ideal trust documents for your situation.

Step One: Identify Your Goals

Before you can draft a trust document, you will need to identify your goals. Your goals will ultimately determine what kind of trust you need and what language your trust document should include.

Step Two: Select the Type of Trust

Once your goals are clear, you and your attorney will choose the most appropriate type of trust. This decision should reflect both your present situation and your future goals.

Step Three: Choose a Trustee

The trustee is responsible for managing and distributing the trust assets in accordance with your instructions. You may serve as your own trustee in some cases, or appoint a trusted individual, family member, or corporate trustee. Our attorneys can help you understand your options.

Step Four: Draft the Trust Agreement

Your attorney will draft the legal document that outlines the trust’s terms. This often includes the trustee’s powers, the beneficiaries’ rights, and specific instructions on how assets should be distributed.

Step Five: Fund the Trust

A trust only becomes effective once it is funded. This means transferring ownership of assets into the trust’s name. If assets are not properly retitled, they may still be subject to probate even with a trust.

Why You Need a Trust Lawyer

Trusts are powerful tools, but that does not mean they are easy to set up. Any errors during the setup of a trust can lead to devastating consequences down the line. Working with a Philadelphia trust lawyer ensures your trust is structured properly from the start and remains compliant with changes in the law or your circumstances.

Trusts are not just for the wealthy. They are used by families of all income levels to manage inheritance, care for loved ones, and plan responsibly for the future. With the help of a Philadelphia trust attorney, you can create a plan that gives you control today and for years to come.

Talk to a Philadelphia Trust Attorney Today

If you are ready to discuss your future, our attorneys are here to help. At Klenk Law, we can advise you on your options and review the best options available. While some people believe that a standard last will and testament is enough to meet their needs, many are surprised to learn just how versatile a trust can be. Our team can advise you on what is available to you. Reach out to a Philadelphia trust attorney today to learn more.