A will or a living trust are two valuable tools used for estate planning. A will is important to avoid having your estate distributed in accordance with Pennsylvania’s laws. A living trust can essentially operate as a vault to hold several types of assets that you transfer into it. Both wills and living trusts have advantages for their creators and their beneficiaries. If you or a family member needs help choosing between a will or a living trust, you should speak with an experienced southeast Pennsylvania estate planning lawyer. The lawyers at Herr Potts and Potts possess over eight decades of experience that they will use to help you determine whether a will or living trust is right for you. Herr Potts and Potts are here to explain whether you need a will or a living trust in Pennsylvania.
Benefits of a Will
A will is used to distribute the assets of your estate after your death. In Pennsylvania, you should name a personal representative who will be responsible for distributing your estate assets after your death. The personal representative must also settle all of a deceased person’s (decedent) affairs before the property can be distributed to beneficiaries named in the will. This process is known as probate or estate administration.
Once probate has begun, a personal representative must complete a variety of tasks, such as:
- Informing beneficiaries and publishing notice of the decedent’s death in local Pennsylvania newspapers
- Informing creditors of the decedent’s death
- Collecting all assets of the decedent
- Identifying and paying off all debts of the decedent
- Handling all necessary tax matters for the decedent’s estate
- Distributing decedent’s assets after the above tasks are completed
The purpose of the probate process is to prevent fraud and protect creditors and ensure beneficiaries receive their rightful share of the decedent’s estate.
Not all assets of a decedent must pass through the probate process. Assets and other property held jointly by spouses or other parties pass through the right of survivorship. This means that the property will automatically pass to the living party and skip the probate process. Joint bank accounts, life insurance policies, and several types of retirement plans are also exempt from the probate process.
The probate process in Pennsylvania does not normally last for long because a personal representative has broad discretion to complete their tasks. Since Pennsylvania courts only take on a small supervisory role, the probate process can be completed quickly if the personal representative works diligently.
Why Should I Create a Living Trust?
Living trusts are used for the management of assets for the benefit of a third party. To create a living trust, the creator or trustor gives legal title to property and other assets to a trustee, to manage for the benefit of the beneficiary of the trust. A living trust is not created until the trustor transfers property into the trust.
The role of the trustee is to manage the assets in the trust in accordance with the trustor’s rules or wishes. If a trustor created a revocable living trust, they could revoke or change terms of the trust at any moment after the revocable trust’s creation. If a trustor creates an irrevocable trust, they cannot revoke or change any terms of the irrevocable trust after its creation. The trustor of a living trust may also serve as the trustee. However, this does not exclude a trustor from following the terms used to set up the trust.
The trustor of a living trust can set conditions that beneficiaries must meet to gain access to the trust. For example, the trustor can state that a beneficiary may only gain access to a trust after they get married or after they graduate from high school.
There are some disadvantages to a living trust. For example, the trustee does not have the same powers as a personal representative and cannot wrap up a decedent’s estate. Trustees who break the rules set by trustors are also open to lawsuits for an indefinite amount of time, even after the contents of a living trust are distributed.
This is not a comprehensive guide to all the benefits and disadvantages of wills and living trusts. If you wish to know more, you should speak with an experienced estate planning attorney.
Southeast Pennsylvania Estate Planning Attorneys Can Help You Decide Between a Will or Living Trust
If you or a family member are considering creating a will or living trust, you should consult with an experienced southeast Pennsylvania elder law attorney. The attorneys at Herr Potts and Potts are available to help you determine whether a will or living trust is perfect for your unique situation. To schedule a confidential consultation, call us at (610) 254-0114 or reach us online.