Monday, September 20, 2010

Living Trust?

Do you really need a living trust? Living trusts, also known as Revocable Living Trusts (RLT's) have been an on and off fad in Pennsylvania for at least the last fifteen years.

There appears to be a resurgence in the discussion about living trusts. Think Suze Orman, or the mailers you probably get emphasizing the absolute necessity of a living trust.

A living trust is not a silver bullet, and they are not for everyone, particularly in Pennsylvania. Certain states, like California or Florida, have a probate process that is much more burdensome than the one in Pennsylvania. Pennsylvania's probate process is much simpler, and is not court supervised.

In other words, if you are only interested in having a living trust to avoid probate, and you live in Pennsylvania, you may be spending a lot of money on something you really do not need.

Another misconception is that a living trust will allow a person to avoid taxes. This is categorically untrue. Any tax saving or tax reduction strategies can be carried out and executed with a will just as easily as with a living trust.

Because probate is simpler in Pennsylvania and living trusts are not tax avoidance tools, many people in Pennsylvania have wills as their fundamental estate planning tool.

A living trust does have benefits for certain cases. You should seek an estate planning attorney to help educate you about what tools you need for your estate plan. Estate planning is a very individualized field of law, and the tools you need depends on your family, your circumstances and your goals.

Let our firm assist you: Our firm offers a complementary estate plan review and consultation. Please call us today at (215) 706-0200 or email us.

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