Some Pennsylvania residents may assume that trusts are only necessary for the very wealthy. However, many estate owners can benefit from a trust. In fact, some may want to use a will just to appoint an executor and a guardian for minor children.
Certain assets, such as retirement accounts, usually pass through beneficiary designations, and this means they do not have to go through probate. Assets passed using a will must go through the probate process, which can be time-consuming. With a trust, however, assets pass directly to beneficiaries. Another reason to use a trust is that it can give the creator some control over how assets are distributed. For example, they may want distributions to go to their adult children on certain birthdays. A trustee could also be given additional discretion to make distributions for other reasons, such as a wedding. Trusts can also be useful in blended families to ensure that children from the first marriage receive assets.
Some people may also use trusts to avoid estate tax or to get other tax advantages. It is important to stay abreast of laws and periodically review the estate plan in light of possible changes. After all, strategies may need changing from time to time.
An attorney could help a client stay informed about changes in tax laws. Legal counsel might also help ensure that the trust is prepared and funded correctly. Creating but failing to fund a trust is one common error. A will can also be written so that any assets that have not been placed in the trust automatically belong to it when the creator dies. Trusts may also be used to help provide for family members with special needs, donate to charity or protect assets from creditors.