There are many different types of trusts, but generally are defined as the relationship created for the control of an asset by one person, for the benefit of another. The parties involved are known as the Grantor, the Trustee and the Beneficiary and can all be the same person in some trusts. Because there are many types handled by various professionals, they can be complicated during probate.
Some types of trusts among many others, include an revocable or irrevocable trust, grantor trust, charitable trust, or personal residence trust. These are common types of trusts which specify the manner of transfer and can be of particular concern during the probate process.
Revocable trust: this can be changed or revoked at any time. Similarly, an irrevocable trust cannot be changed.
Grantor trust: this type of account designates the Grantor as the owner for Federal Income Tax purposes.
Charitable trust: this is to benefit a charitable beneficiary; if created and managed properly, it can allow for a reduced estate tax.
Personal residence trust: this is an irrevocable trust where an individual transfers his or her residence that usually permits the transferor to continue use of the property. This can be a specified number of years and usually occurs with parents transferring to children. This type of trust can be useful in removing the property from the estate, thus reducing the Federal Estate Tax and minimizing or eliminating Federal Gift Tax on the transfer.
These are only a few examples, and understanding how to manage them during probate can be difficult. Or for those planning their estates, consulting with a Bucks County estate lawyer can help you proactively choose a trust to fit your desired estate. Contact our office today by calling (215) 486-8171 or submitting an online inquiry form for more information and to schedule a consultation with a Doylestown estate lawyer.