What are some things people misunderstand about trusts?

What are some things people misunderstand about trusts?

On Behalf of | Aug 27, 2019 | Firm News |

Utilizing trusts in your estate plan in Pennsylvania is a good idea, but you should make sure that you are using them in the right way. The Pennsylvania Bar Association explains a trust transfers your assets through a trustee who then takes charge of distributing them. This works in a variety of situations, such as when you have a minor heir who you do not want to get a big inheritance all at once. However, there are many different types of trusts and not everyone will be right for your situation.

You can create the trust while you are alive and manage it yourself. You should understand the rules for the specific type of trust you set up. Some trusts may have tax benefits, but others do not. You want to be sure the trust will be the best option for you and your heirs.

A good example of a trust that many people start is a living trust. This type of trust is subject to taxation. They allow you to keep control and ownership of your assets until you die at which time the trustee takes over the assets and carries out your wishes for disbursement.

The main issue with using a living trust is that many people think it will take the place of a will. This is not a good idea, though, because a trust cannot cover all your assets. Any assets left out will be left up to the court to disburse. In addition, if a part of the trust is found invalid, it will affect what happens with your assets. This information is for education and is not legal advice.


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