First things first: What exactly is a living trust, and why might you want to create one? How is a living trust different from other sorts of trusts? And is the process of creating one in the Commonwealth of Pennsylvania significantly different than doing so in other states?
By the time you’ve finished reading this, you’ll have the answers to those questions and a basic understanding of how living trusts work in Pennsylvania, and how creating one might benefit you and your family.
What Is a Living Trust?
As its name implies, a living trust is created while you’re still alive. In that way, it differs from the sort of trust that might be created after your death, assuming you’ve instructed such a trust to be created in your will.
The basics are fairly simple and straightforward. With a living trust, you can place assets under a trustee’s care. That trustee then allocates them to you beneficiaries as per your wishes.
For those of you who may have a substantial estate to your name—real estate and savings, for instance—and would like to make sure that all or some of that estate is passed on in some way to your children or grandchildren, the creation of a living trust can help make that a possibility.
Who Is Involved in the Creation of a Living Trust?
Three separate parties are required when a living trust is created.
- The settlor (sometimes called the trustor) is the party that creates the trust. Presumably, that would be you.
- The trustee is the legally appointed person who administers the trust according to the terms you’ve set.
- And the beneficiary, of course, is the person (often a child or grandchild of the settlor) who will be receiving the property held in the trust.
It’s interesting to note that you can indeed act as the trustee of your own living trust. It isn’t necessary, in other words, to hire someone else to act in that role.
How Is the Process of Creating a Living Trust Different in Pennsylvania?
One word: Probate.
Probate is the process – overseen by the court – that involves everything from paying debts and taxes and identifying heirs to identifying and inventorying the property that belonged to the deceased person in question.
Which all sounds reasonable enough. Until, that is, you begin to understand that the probate process is also a very expensive and very time-consuming process. Take it from us: If you can manage to avoid the probate process, you’d be well advised to do so. Having a living trust—as opposed to having only a will—is one way to help your family members avoid the nightmare of the probate process after you pass.
Indeed, probate has become such as well-known legal headache that a number of states have begun offering a greatly simplified probate procedure for low-value estates. This very popular process is known as the Uniform Probate Code. As it happens, however, Pennsylvania is one of 32 states that have not yet chosen to adopt any part of the Code. And because Pennsylvania doesn’t use the code, it may be wise to create a living trust to avoid the state’s complicated probate system.
How Do You Create a Living Trust in Pennsylvania?
Thankfully, it’s not an especially complicated process. Your first step will involve creating the actual trust document, which, aside from naming you as the trustee, should lay out the details of who will eventually be inheriting the trust’s property.
And while it is technically possible to create a living trust document by yourself, you’ll most likely be quite a bit better off by availing the help of a qualified attorney. After all, a trust document without the proper t’s crossed and i’s dotted can very quickly end up becoming the sort of document that is much more trouble than it’s actually worth. The Pennsylvania attorneys at Penglase & Benson are very well-equipped to help you navigate the living trust document creation process.
Once your living trust has been created, you’ll need to have it signed in the presence of a notary public. Finally, you’ll need to go through the process of transferring any of the property named in the trust to your name—specifically as the living trust’s trustee.
Again, these seemingly simple but often tricky steps are all part of the living trust process that the Penglase & Benson team has had extensive experience mastering. If you’re interested in learning more about how our team can help make the process of creating your living trust document a stress-free experience, contact us today to schedule a no-strings-attached initial conversation. We think you’ll be very pleased with the information we’ll share, and with the insider’s knowledge you’ll gain. We look forward to hearing from you.
