When you reach retirement age, you may begin thinking substantially about the many assets you have acquired throughout your lifetime. You know that you want to gift specific assets to certain loved ones, but you are unsure whether a permanent or changeable trust will prove best for your situation.
Two types of trust exist in Pennsylvania for allocating assets to your family members and close friends. Both revocable and irrevocable trusts have benefits, but they both provide peace of mind to those that enact a trust. Creating a document that protects and allocates your assets constitutes a responsible decision, so you and your beneficiaries can find comfort in knowing your property lies securely in a legal documentation. When developing a trust, it may prove beneficial to utilize the expertise of an estate planning attorney, so that he or she can help you in determining the best trust for your unique situation.
Revocable trusts can be modified
When you prepare a revocable trust, you may know which beneficiaries will receive which assets, yet you may not want to finalize this decision. In this moment in time, you recognize certain individuals that may benefit from your generous gifts, but you wonder whether your relationship with them will change over time. Perhaps you expect another grandchild or a new marriage in the family, and you want to ensure that you can alter your trust document to reflect your newest family members.
You can change revocable trusts throughout your lifetime. When you pass away, the trust changes to an irrevocable trust, and your trustees receive benefits.
Probate is not usually necessary after establishing a revocable trust, as the assets quickly face distribution to your loved ones.
Irrevocable trusts are finalized
The benefit of irrevocable trusts that entice many individuals is their finality. When you allocate specific assets into an irrevocable trust, the assets are seen as now belonging to your loved ones in the future. This means that if a creditor wishes to obtain debts, it cannot access these specific assets.
For those that know exactly which assets will belong to which beneficiaries, they may want to establish an irrevocable trust. With these trusts, you can know that all property you allocate in the document will go directly to your loved ones, and you have no need to return to the document.
Estate planning is essential for everyone, but especially for those entering retirement. Whether a revocable or irrevocable trust proves best for your situation, you want to begin determining your beneficiaries and your generous gifts, so that your assets can avoid probate and go directly to your designated loved ones.