Assuming that it is created in compliance with Pennsylvania law, a trust can be an excellent addition to your estate plan. One of the key benefits of this type of document is that it allows you to hold assets outside of your estate. This means that they are not subject to probate after your death.
Trusts aren’t a matter of public record
Unlike wills, trusts are not a matter of public record, which means that no one will know the terms of your estate plan. This can be especially beneficial if you don’t want friends, the media or others to know what you have or what your children or grandchildren now own. The fact that a trust’s terms remain private may also minimize the risk of family infighting as no one will know what anyone else received.
A trust protects assets from creditors
As trust assets are held outside of your estate, they generally cannot be seized by creditors. Therefore, they are often exempt in bankruptcy proceedings or off-limits to government agencies or others looking to get paid. Of course, this assumes that the trust was created in good faith, not merely to defraud creditors. You may also be able to keep assets in a divorce settlement by placing them in a trust.
A trust takes effect immediately
Another important feature of a trust is that it takes effect as soon as it’s executed. Therefore, if you become incapacitated, someone will be able to manage your affairs. This means someone can take money from a bank account to pay your bills or transfer assets to a beneficiary. It also means that your kids will have access to the money and other resources needed to live a comfortable lifestyle.
Taking proactive estate planning steps may make it easier to keep assets under your control while also shielding them from adversaries. In addition, a trust allows you to gift assets or take other steps to minimize estate taxes or family conflicts after you pass.