Gross McGinley LLP

gross-headerimg-3
Blog Disclaimer

Blog Disclaimer

This Blog is intended for educational and informational purposes and intended to only provide you with a general understanding of the law, not to provide any legal advice, including on the subject of the Blog. Laws that may pertain to this Blog will vary by jurisdiction, and the information on this blog may not apply to you. The content within this Blog is not intended, and should not be construed, in any way to be legal advice and thus you should not rely on any information provided in the Blog as legal advice. You should consult with appropriate legal counsel concerning any issues for which legal advice may be needed. Your review or use of the Blog and the content therein is not intended to create, and does not constitute, an attorney-client relationship. Please contact us if you have any questions about a Blog or would like more information, but, by contacting us, no attorney-client relationship is formed between you and Gross McGinley, LLP, including the Blog author. Do not send any confidential information to Gross McGinley, LLP or the authors of the Blog without first speaking to one of our lawyers and receiving our permission to provide confidential information. Unsolicited confidential information sent to us may not be subject to an attorney-client privilege and may not be treated as confidential. This Blog is not published for advertising or solicitation purposes. Gross McGinley, LLP disclaims all liability to all persons for any claim, loss, liability or any damages that may arise in connection with the Blog and any content or information contained in the Blog. Even though we strive to create our Blog content based on our current understanding of the law, we cannot and do not guarantee that the content and information in the Blog is current, accurate, or complete. Gross McGinley, LLP owns the copyright in the Blog, which is protected by federal and state laws, including copyright laws. The Blog cannot be altered or modified in any way. A copy of the Blog may be used and printed only for personal, educational, informational and noncommercial purposes. The Blog cannot be used for any other purpose without the express permission of Gross McGinley, LLP.

Should an Estate Plan Include a Trust?

Written by: on February 04, 2020 | Category: Blog, Events, News | Tags: , ,

Estate planning is a complex process and applies to all adults age 18 and older. However, there is a misconception about estate plans, as many people believe they may not need one if their net worth is minimal. And, what about Trusts? Should an estate plan include a Trust?

Attorney Nick Nanovic joined Valley National Financial Advisors’ Laurie Siebert to discuss this topic on WDIY’s Your Financial Choices show. In an episode entitled “Trusts – When Do They Make Sense?,” the two shared their knowledge.

In addition to basic estate planning documents, such as a Will, Power of Attorney and Health Care Directive, there are various types of Trusts that may make sense. Consider some of the most common Trusts in an estate plan below:

Testamentary Trust

This is a Trust that lives within your Will document and does not exist until after your death. You can modify the terms of this type of Trust any time that you update your Will. Although this does not provide any tax savings or protection from your own creditors, this type of Trust is very common to protect the inheritances of your beneficiaries.

Revocable or Living Trust

After a Testamentary Trust, the most common Trust is a Revocable or Living Trust. Because the Trust is revocable, you can move assets in and out of the Trust at any time during your life. This type of Trust may be useful to avoid probate and the risk of administering your Estate in several jurisdictions.

In PA, probate fees are not typically considered burdensome, but certain individuals may consider a Revocable or Living Trust if the potential probate fees are large enough. Additionally, if you own real estate in several states, your Executor will be required to administer your Estate in each of those states. However, if that real estate is owned by your Pennsylvania Trust rather than you, all interests in real estate will be governed by Pennsylvania law and it will not be necessary to administer your Estate in several jurisdictions.

As a caveat, every individual must review the tax consequences of moving real estate into a Pennsylvania Trust before executing a new deed.

Irrevocable Trust

An Irrevocable Trust, the opposite of the Revocable Trust, generally cannot be changed once it is created. This type of Trust is often used to remove assets from your taxable Estate. Proceed with caution; you should not expect to ever have access to any assets that you move into an Irrevocable Trust.

AB or Marital Trust

If you created your estate plan with a spouse prior to 2010, it’s likely you included an AB or Marital Trust. This type of Trust divides your assets between a Marital Trust and a Non-Marital Trust (sometimes referred to as a Family Trust). The purpose of this type of planning was to minimize any potential Federal Estate Tax. However, with the introduction of portability in 2010 and the increased exemption rates, this type of plan may no longer be necessary for you. If you have this type of Trust, consider whether it is still useful to you under today’s laws.

These trusts and more were discussed by Nick and Laurie. Listen to the full WDIY podcast featuring Attorney Nick Nanovic here. See if your estate plan should include a Trust.

Next Previous
View All Attorneys
View All Practice Areas
View Blog