A Revocable Trust, also known as a “Living Trust,” is established during one’s lifetime as part of a Pennsylvania estate plan. The settlor of the trust (the creator of the trust) often retains the right to income and principal and the right to amend or revoke the trust at any time prior to his or her death. When the settlor dies, the trust becomes irrevocable, and the assets in the trust are distributed pursuant to the terms of trust instrument. A Revocable Trust is often used as an alternative for a Last Will and Testament in a Pennsylvania estate plan.
Revocable Trust v. Last Will and Testament
In Pennsylvania, a Revocable Trust can have several advantages over a Will. The advantages of a PA Revocable Trust include the avoidance of PA probate, planning for incapacity, avoidance of ancillary estate administration (in another state), and avoidance of potential Will contests. These advantages are not always significant, and they must be viewed in light of a client’s particular needs and circumstances.
At The Martin Law Firm, our experienced Pennsylvania Revocable Trust lawyers can weigh these factors before a decision is made as to the selection of a Will or a Revocable Trust. For example, in some states, probate costs (the costs involved in probating a Will) can be expensive. In those situations, preparing a Revocable Trust would be advantageous because the estate assets would not be subject to probate. This would save the estate a significant amount of money. In Pennsylvania, however, probate costs are relatively low, and this is generally not a major consideration in deciding to prepare a Revocable Trust or a Will.
How a Pennsylvania Revocable Trust Works
When you create a Revocable Trust, you are referred to as the settlor of the trust. The Revocable Trust instrument itself is drafted by a Pennsylvania estate planning lawyer. The Revocable Trust document names trustees as well as beneficiaries, who will receive the trust assets upon your death. While you are alive, you typically retain full ownership and control of the trust assets; however, you no longer own the assets – the trust does. In order to accomplish the trust ownership, you would need to transfer the deed to your house to the trust along with your other assets. Then, upon your death, the beneficiaries named in the trust will receive those assets. No one has to take the trust to the Pennsylvania Register of Wills office for probate. The trustee that you name to replace you upon your death is empowered to transfer the assets to the appropriate people according to your wishes.
Disadvantages of a Revocable Trust in PA
There are no estate tax or PA Inheritance Tax benefits for a Revocable Trust. As stated above, probate costs are not particularly high in PA, so there are not many practical advantages to using a Revocable Trust instead of a Will, at least in Pennsylvania. There are some disadvantages to using the Revocable Trust. First, you generally will have to pay your PA estate planning lawyer more to set up a Revocable Trust, as opposed to a Will. Second, it will cost you money to transfer assets into the trust. Third, you will always have to make sure that any newly acquired assets are owned by the trust. In general, there are more administrative concerns in order to maintain a Revocable Trust.
Revocable Trust Lawyers | Pennsylvania
If you wish to consider a Revocable Trust as part of your Pennsylvania estate plan, contact the experienced PA Revocable Trust lawyers at The Martin Law Firm for a free case evaluation. Our Pennsylvania Revocable Trust lawyers will be happy to review your existing estate planning documents at no charge to see if any updates or changes should be made. Contact The Martin Law Firm today at 215-646-3980 to schedule an appointment with one of our knowledgeable Revocable Trust lawyers.