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| How Pennsylvanians can protect
themselves and their families through proper estate
planning. |
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| Assets can pass in several ways at death including: |
• Joint ownership, such as a house owned by
husband and wife;
• Contract law, such as
an insurance policy, and;
• Probate, which
serves to pass title to assets decedent held in his
or her own name to their heirs. |
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| In probate, a will is presented, or “proved,”
to the court (the Registrar of Wills in Pennsylvania)
and accepted if valid. If there is not a will, the
process encompasses distribution under the intestate
laws of the state. |
| In either case, an administration is raised
and a personal representative is appointed by the
Register of Wills to administer the estate. This
entails, at a minimum, collecting the assets, paying
the just debts and taxes and making proper distribution
to their heirs. |
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| Trusts have existed for hundreds of years. A trust
is created by a transfer whereby the interest in property
is split between the legal title and the beneficial
estate. |
| In a typical arrangement the trustee holds legal
title to the property and holds it for the benefit
of the beneficiary (often the income interest) and
the remaindermain (those who take the property at
termination – usually the beneficiary’s
death.) |
| Trusts are either inter-vivos (created by a deed
of trust) or testamentary (created by will). |
| The phrase “Living Trust” is a term
for an inter-vivos trust and has no legal meaning;
it is a term made up by lay persons who market and
promote these arrangements. |
| “Living Trusts” are usually sold to
avoid probate. A person creates the trust with himself
or herself as trustee and appoints a trustee (usually
a child) to distribute the trust property at death.
This arrangement is really a trust only in name. |
| When used in this web page, the term “Living
Trust” is confined to those revocable trusts
where the creator is sole trustee with distribution
at death. |
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