Trusts and Wills

One of the most common questions I get as an estate planner is "Do I need a Trust or a Will?". My answer is that it depends on your assets and desires as well as how much control you want over how everything is handled after you are gone.

A Will, commonly known as a Last Will and Testament gives instructions on what to do with your assets after you are gone. This includes both your personal assets like your furniture, collections, dinnerware, etc. and your real property like your house and campsite or vacation home. Importantly, the Will can only dispose of those things which you actually own at the time of your death. This does not include:

  • joint assets like cars, bank accounts or investments
  • property that is held in joint tenancy
  • assets held in a trust or corporation
  • gifts you have given away over 367 days ago

Your 'estate' is only comprised of those assets which were in your name at your death and do not otherwise pass by operation of law after your death. Things like individual bank accounts, cars with just your name on the title, houses and other property in your name or as tenants in common with others are all common examples of what your Will disposes of.

When you die, the Commonwealth of Pennsylvania will come looking for someone to take control of the assets you left behind in your name according to the rules above. The Commonwealth of Pennsylvania recognizes that immediately upon your death, there ceased to be an owner of the assets and the Commonwealth waits for someone to come forward with instructions as to who those assets are to go to. Specifically, the Commonwealth is looking for your Will to tell them who it is who gets the assets [beneficiaries] and who it is who is to ensure that those assets are given to them [executor]. Your Will should clearly state who gets what, when and who is responsible for doing so. Additionally, your Will should be witnessed by two person who are getting no benefit from the will [non-beneficairies] and ideally be in front of a notary at the time of execution. This is called a 'self-authenticating' Will in Pennsylvania and will save time and effort in getting the Will into Probate.

So what is Probate? Probate is 'proving' the Will. This is proving to the Commonwealth that the document was written by you, signed with your mark or signature and was not revoked or supplanted by a subsequent document or writing. Probate is an ancient custom dating back millennia where the Will is publicly stated as proven and all can bear witness to your instructions. To wit, all Wills entered into Probate are a permanent part of the public record and can be easily accessed at the court in which they were filed.

However, maybe you do not want everyone to know what you had in your Will. Perhaps you left out someone or just enjoy your privacy. What then could you do? You could die without any assets in your name. One way to accomplish this while maintaining maximum control over the assets while you are alive is a revocable living grantor trust. The trust, rather than you, owns the assets, with you having control and access to any and all of the assets during your life. Upon your death, as you owned nothing, there is no need to open Probate or present a Will. No one will ever know where or to whom you sent your assets unless they are a beneficiary. Additionally, fees in administration [lawyer fees] are substantially reduced as the courts are not involved in trust administration in most cases. Distribution of assets is without court supervision, so much more expedient and the overall trust administration tends to be much smoother as all assets were already made part of the trust.

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