When trying to decide how to handle real estate within the larger estate planning process, many families turn to trusts. There are multiple different types of trusts, some of which may offer a better fit for a Pennsylvania family than another. In the case of a living trust, it is important to understand how to set up the trust, and how to ease the eventual trust administration process.
A living trust is one that is created during a homeowner’s lifetime, and involves re-titling the home into the name of the trust itself. A living trust can be either revocable or irrevocable. A revocable living trust is one that allows the homeowner to retain complete control over the piece of real estate, as well as any other assets that are placed within the trust. The downside is that a revocable living trust offers no protection from creditors.
An irrevocable living trust is one in which the homeowner largely cedes control over the assets placed within the trust, and cannot remove those assets. The benefits, however, include removing the assets from the owner’s taxable estate. Protection from creditors is another appealing aspect of an irrevocable trust. Stipulations can be placed on the trust that limit the ability of beneficiaries to access the wealth held in trust, which can be important to some families.
When determining how to handle the disposition of real estate in the larger estate planning process, it is important to understand the ins and outs of all available options. Working with an estate planning attorney can not only provide a wealth of legal guidance on the matter. It can also assist with securing trust administration services, which can make things far easier for a Pennsylvania family who is entering the grieving process after a loss.
Source: marketintelligencecenter.com, “Proper asset titling: Estate planning and your home“, Joe Favorito, Sept. 30, 2016