What Sets a Living Trust Apart?
Posted on Mon Jun 10, 2019, on Estate Planning
Estate Lawyer in Allentown, PA
When making out an estate plan, you have many options available to you, so much so that the choices may seem overwhelming at times. You may wonder whether you should have a living trust or a will. In some cases, the answer turns out to be that you should have both! You need the information an estate planning lawyer provides to help you decide. It may be helpful to understand what a living trust is and how it differs from other estate planning tools. Let’s talk about What Sets a Living Trust Apart.
What Is a Living Trust?
A living trust has many essential features in common with other types of trusts:
- A trustee holds the assets, but unlike other trusts, you are typically the trustee.
- The trust terms guide the trustee as to the use/distribution of the property, typically expansive powers.
- The trustee (you) manages the assets in the trust and uses them for the beneficiary (you).
The main difference between a living trust and other trust types is that you maintain control over the assets contained within as long as you are alive. The trustee manages the property in the trust for your benefit until you die. Following your death, the property transfers according to your instructions to the trust’s beneficiaries.
What Are the Differences Between a Revocable and an Irrevocable Trusts?
Some people mistakenly equate a living trust with an irrevocable trust. The principal difference is that a revocable trust is “revocable.” If you change your mind or experience an alteration to your circumstances, you can take back all the assets into your name. Further, you can easily make changes to a revocable trust at any time. In the alternative, it is difficult and sometimes impossible to change an irrevocable trust once its creation. For this reason, it is crucial to receive the help of an experienced estate planning attorney when creating an irrevocable trust. Irrevocable Trusts are excellent tools but use professional guidance.
Follow this link for more information about Irrevocable Trusts.
How Is a Living Trust Different From a Will?
A will and a trust both allow you to transfer property to named beneficiaries. Nevertheless, there are some significant differences between the two. Perhaps the most fundamental difference is that the terms of a living trust provide advantages during your life and after your death. By contrast, your death is the only circumstance under which a will goes into effect.
Initially, it costs less to make out a will than it does to create a trust. However, an irrevocable trust may save your loved ones in estate taxes after you are gone. Additionally, a trust does not have to go through the probate process, meaning that the transfer of property can be faster and smoother.
Follow this link for more information about Revocable Trusts. This more extensive article helps explain What Sets a Living Trust Apart.
What Sets a Living Trust Apart?
A living trust can accomplish things that a traditional will cannot. But these advantages might not outweigh the additional costs. A proper review of your situation, assets, and goals will reveal which tools are best. We have offices in Philadelphia, Doylestown, Cherry Hill, King of Prussia, and Allentown. We can help!
Contact an estate lawyer in Allentown, PA for more information.
Contact Klenk Law for their insight into estate planning and living trusts.
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