From Our “Ask a Question” Mailbag: “I read about trusts for children. Can a trust protect my children? Do I need a Philadelphia Trust Lawyer?”
Philadelphia Trust Lawyer, Protecting Children for Over 30 Years.
Philadelphians are lucky to have access to Pennsylvania’s extensive Trust laws. Over the last 20 years or so (I am feeling a bit old), Pennsylvania has made extensive changes to its trust rules, making protecting your children’s inheritance easier than ever. There are many possible ways a trust can be used. Which Trust is right for you depends on your situation, assets, children, and overall goals.
Our Estate Planning Team has been drafting Trusts for over 30 years. I would be happy to brainstorm with you about your unique situation. This article briefly introduces a few of the most common Trusts, and we provide links for more detailed information. By the end, you can tell if you need a Philadelphia Trust Lawyer to protect your children.
Revocable vs. Irrevocable.
You are likely searching for an Irrevocable Trust when discussing trusts to protect children. But I understand these terms can be confusing if you don’t work in the trust area. Let’s start with a short primer.
A Trust exists when a person (the Grantor) “grants” power to a trusted person or company (the Trustee) to hold an asset for a Beneficiary. Traditionally, this is done at death through a will. These trusts are Irrevocable, as the Trust only exists when the Grantor is dead and unable to change the terms. For example, you (the Grantor) could have us draft a Will that grants your brother (the Trustee) the right to hold all your assets for your child’s benefit (the Beneficiary).
A Revocable Living Trust exists when the Grantor forms the Trust while living and retains the right to revoke the Trust. Typically, the Grantor serves as the Trustee for a Revocable Trust and is the only Beneficiary. At the Grantor’s death, the Revocable Trust becomes Irrevocable (the only person with the power to revoke has died). A Revocable Trust is usually formed by someone who wants to avoid probate, as it does nothing to protect you from creditors or taxes.
Therefore, if your goal is protecting your children, you are likely asking me to form an Irrevocable Trust.
Some Typical Examples of Useful Trusts.
A Revocable Living Trust can be a Great Tool.
A Dynasty Trust is an Irrevocable Trust To Protect Your Children.
A Dynasty Trust is an excellent tool if your goal is keeping the family money away from your son-in-law or your children’s creditors. These Irrevocable Trusts can be formed while you are alive but typically are formed using your Will at your death. They can be almost cost-free to run and keep assets out of your children’s names. If the Trust owns the inheritance, it doesn’t become your child’s Marital Property. If it isn’t Marital Property, it is sheltered in case of divorce.
Follow this link for more information about Dynasty Trusts.
A Supplemental Needs Trust.
If you have a child or grandchild who depends on needs-based government benefits, you can unintentionally disqualify them by leaving them an inheritance. We can help by having your Will form a Supplemental Needs Trust. These trusts, approved by the government, allow you to set money aside to help the Beneficiary but do not disqualify them from their needs-based programs. They can make the difference of a child having nothing but what the government provides or having extra money to help make life more enjoyable.
We set up hundreds of Special Needs Trusts annually and would be happy to talk to you about how one might fit your family’s needs.
In Conclusion: Can a Philadelphia Trust Lawyer Keep Your Children’s Inheritance Safe?
I hope you found this short article dedicated to the question, Can a Philadelphia Trust Lawyer Keep Your Children’s Inheritance Safe? I have also included some links for more detailed information.
To learn more about Irrevocable Trusts in general, with examples of many other Irrevocable Trust tools, follow this link to read about Irrevocable Trusts.
Contact us if you want to know more or have an estate needing our help. Let our Probate and Estate Planning lawyers help walk you through what can be a confusing process. Feel free to contact our office for a free consultation.
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