Wills and trusts are both estate planning tools used to convey property in Pennsylvania. Wills and trusts are different because they each offer certain advantages to their creators and beneficiaries. For example, a valid will can help you avoid Pennsylvania’s intestacy law, while a trust can put conditions on the disbursal of the trust’s contents. If you or a family member need help to determine whether to choose a will or a trust, you should speak with an experienced southeast Pennsylvania estate planning lawyer. At Herr Potts and Potts, our lawyers can help you decide which estate planning tool is perfect for your unique needs and assist you in creating a will or trust. Herr Potts and Potts are here to explain the difference between wills and trusts in Pennsylvania.
What Does a Will Do?
A will is a legal document that is typically the foundation of estate planning tools available to residents of Pennsylvania. The creator of the will, also known as the testator, uses a will to distribute real and personal property and other estate assets to beneficiaries he or she named in the will.
When a person executes a will, they should also choose a personal representative or executor to carry out their wishes. After the death of a testator, the personal representative must complete a variety of duties before distributing estate assets in accordance with the will, some of these duties are:
- Probating the will and beginning the estate administration process
- Informing all beneficiaries named in the will
- Publishing the testator’s death and posting notice of the estate administration process in local PA publications
- Informing outstanding creditors of the estate administration
- Taking inventory of all estate assets
- Paying all outstanding debts and creditors the estate owed
- Resolve necessary tax matters before completing the administration of the estate
Once a personal representative has completed these tasks, and some others, they can distribute the estate to beneficiaries named by the testator. A will can also be used in other ways like to name a guardian for any minor children you may leave behind or naming a responsible party who can manage any assets left to minor children.
If you die without having a will in Pennsylvania, your estate will be distributed by Pennsylvania’s intestacy laws. To die intestate means to die without a will. Pennsylvania’s intestacy laws essentially create a will for you and divide your property among your closest relatives, like your spouse or children. However, if you do not have a spouse or children, intestacy laws will give your property to your property to your parents or possibly to other distant relatives.
Pennsylvania intestacy law does not consider the special needs of your children or other members of your family when making distributions. Therefore, the estates of those who die intestate often end up in the hands of estranged relatives. That is why it is important to have a will in Pennsylvania.
What are the Benefits of a Trust in PA?
A trust is another valuable estate planning tool available to residents of Pennsylvania. A trust is a fiduciary relationship where one individual, known as the trustor, gives another individual, the trustee, the legal title to property or assets to manage for a third party, the beneficiary. The creator of the trust must explain to the trustee the rules for the trust, how the trustee must perform their job, and identify the beneficiary of the trust. A trust does not become effective until the grantor transfers property or assets to the trust.
There are many forms of trusts that a resident of Pennsylvania can execute. However, there are two types of trusts that are very common. These trusts are testamentary trusts and living trusts.
A testamentary trust is created in conjunction with a will and allows the property to be transferred into a trust after the death of a trustor. A testamentary trust allows a grantor to transfer the whole or part of their estate into the trust. A trustor can even transfer a life insurance policy to the trust. A testamentary trust usually attaches a condition a beneficiary must meet before receiving the contents of the trust. For example, a trustor can authorize a trustee to give the beneficiary access to the trust after they get married.
A living trust is started during the trustor’s life and continues after their death. A living trust can be used to avoid probate if all property subject to probate is placed into the living trust before the trustor’s death. Probate is the estate administration process that a will must pass through before distributing any assets. There are two types of living trusts, a revocable living trust, and an irrevocable living trust.
A revocable living trust allows a trustor to revoke or alter the terms of the trust at any time after the trust was created. Alternatively, an irrevocable living trust does not allow a trustor to revoke or make changes to the trust after it is created.
This information about wills and trusts is not comprehensive. If you wish to know more about these topics you should speak with an experienced wills and trust attorney.
Southeast Pennsylvania Elder Law Attorneys Can Help You Create a Will or Trust
If you or a family member need to know the difference between a will or trust, you should consult with an experienced southeast Pennsylvania elder law attorney. The attorneys at Herr Potts and Potts understand your need to ensure your family is well taken care of in your absence and will work to make that possible. To schedule a confidential consultation with one of our diligent attorneys, call us at (610) 254-0114 or reach us online.