Trust funds are legal entities created to hold assets that will benefit specific people or organizations. People often establish trust funds for their children since the trust fund will keep the assets safe until the children can access the funds. If you live in Pennsylvania and want to know more about estate planning and administration, here is some important information to consider.
Making sure trust fund assets are available for your children
One of the main benefits of a trust fund is that the assets in the fund are shielded from legal claims. This is essential when it comes to estate planning and administration. Except for retirement savings, any assets you possess could be seized by creditors or courts. However, this does not apply to the money in the trust fund. This is important to know if you ever experience a financial decline in your business or you have to file bankruptcy.
A revocable trust vs an irrevocable trust
If you want to ensure your assets are protected during the estate planning and administration process, you may need to consider an irrevocable trust. This type of trust has terms that are created when the trust is established and these terms become permanent unless all beneficiaries agree to a change. Even if you are the one putting money into the trust, you can not change the terms, however, these terms will ensure that the money is safe no matter what financial changes your family goes through.
A revocable trust, also known as a living trust, allows you to retain control over the terms. However, a revocable trust could be subject to seizure by creditors if you need to satisfy a financial debt. If you want to set up a trust fund for your children, speak with an estate planning lawyer to help you organize your finances.