An estate plan can provide for a person’s loved ones financially after that person is deceased. It’s helpful to have information about estate planning options and how they are managed in Pennsylvania.
Individuals may want to consider using a will or a trust, depending on their circumstances.
A will allows a person to determine how his or her assets are distributed upon death. Many people choose to use a will because the process for creating one is straightforward.
In Pennsylvania, a will may be created by anyone 18 years of age or older who is of sound mind. This person is called a testator. The will also must also be signed by two witnesses.
When a person dies with a will, the will goes through a court process called probate where the estate is settled.
A trust is an estate plan that is created by a grantor and managed by a trustee. The trustee is required to administer the trust according to the trust instructions. The beneficiary of the trust is the person to whom the trust is distributed.
With a revocable trust, the grantor transfers assets into the trust during his or her lifetime. The grantor owns the assets that are transferred into the trust.
The trust assets may include bank accounts, cash or real estate, among others. A revocable trust can be changed anytime during the grantor’s lifetime.
An irrevocable trust cannot be changed once it has been created. Both types of trusts avoid probate.
An experienced attorney can help determine which estate plan fits best with an individual’s circumstances and can explain the tax and legal implications of each type.