Click To Call

Email Us For A Free Consultation

No fees for inquiries

(Free consultations are available only in personal injury cases
& it costs nothing to inquire). All inquiries are confidential.
Read our disclaimer

HKQ Firm News

EXPLORING THE BENEFITS OF TRUSTS

Attorney Rick Bishop

Attorney Rick Bishop - Trusts are a complicated subject matter. Creating a trust could be a daunting process. It’s not your typical do-it-yourself project. “Trusts are best handled by a qualified, experienced attorney,” notes HKQ Law’s trust attorney Richard Bishop.

What exactly is a trust?

A trust is an estate-planning and property management tool. To create a trust, the property owner (called the "grantor”, "trustor", or "settlor") transfers legal ownership to a person or institution (called the "trustee") to manage that property for the benefit of another person (the "beneficiary"). The trustee often receives compensation for managing the trust. Under a trust, the trustee has a "fiduciary duty", meaning that the trustee must act solely in the best interests of the beneficiary when dealing with the trust property.

A grantor may name himself or herself as one of the beneficiaries of the trust. The grantor may also act as the trustee and retain ownership instead of transferring the property, but must still act in a fiduciary capacity. (In that case, the grantor should name a successor trustee to act should he or she become disabled or deceased.) If a grantor retains certain powers over or benefits in a trust, the income of the trust will be taxed to the grantor, rather than to the trust.

Types of trusts

There are two broad categories of trusts, "testamentary trusts" and "living trusts." The former transfers property into the trust only after the death of the grantor. If a trust is used to replace or supplement a will, it's a testamentary trust. Living trusts are often preferred over wills because trusts don't have to go through probate, a court-administered process of paying debts and distributing property to heirs upon one's death. However, wills are still important. A will often contains a clause that names the recipient of all property not specifically left to a beneficiary in a trust. Many people include a trust in their wills to reinforce their preferences and goals after death.

A living trust, sometimes referred to as an "inter vivos" trust, commences during the life of the grantor. It may be designed to continue after his or her death. A living trust can be "revocable" or "irrevocable." The grantor of a revocable living trust can change or revoke the terms of the trust any time after the trust starts. The grantor of an irrevocable trust, on the other hand, permanently relinquishes the right to make changes after the trust is created. Living trusts are designed to avoid probate. There may be filing fees for filing the living trust or for transferring property deeds into a trust, but because no court proceedings are involved, court costs are likely to be avoided. Aside from avoiding probate, other common reasons to create a living trust include possibly reducing taxes, ensuring financial privacy, regulating the use of assets, and implementation of the grantor’s intentions.

There are a number of specialized types of trusts, they include (but are not limited to):

AB trusts -- allows married couples with children to reduce or avoid federal estate taxes. By dividing the trust into two parts when one spouse dies. AB trusts reduce the size of the overall taxable estate.

Charitable trusts -- facilitate leaving all or a portion of one’s estate to charity, while enjoying certain tax benefits. These trusts are irrevocable.

Clifford trusts -- allow grantors to transfer assets that produce income into the trust and then reclaim them when the trust expires. These trusts cannot last for a term of less than 10 years plus one day.

Education trusts -- created for the sole purpose of paying for the beneficiary’s education. These trusts can be set up to pay for only tuition, or for any or all expenses of the beneficiary’s education.

Irrevocable life insurance trusts -- formed for the specific purpose of holding a life insurance policy (or policies) on your life. These inter vivos trusts are typically used to remove the life insurance from one’s taxable estate for federal estate tax purposes.

Pet trusts -- created to ensure the continued care of a pet after the owner passes away. In lieu of special arrangements, pets are treated like any other item of personal property.

Special needs trusts -- designed to ensure that disabled or mentally ill beneficiaries don't lose government benefits such as Supplemental Security Income (SSI), Medicaid, vocational rehabilitation, and subsidized housing.

Spendthrift trusts -- protect trust property from a financially irresponsible beneficiary and the beneficiary’s creditors. These property control trusts limit the beneficiary's access to trust principal.

Totten trusts -- created by a deposit in a bank by one person as trustee for another. Income from the trust property is paid to the beneficiary but the property itself reverts back to the settler when the trust expires.

Can you benefit from a trust?

That depends on a number of factors including your age, status, health, goals and estate size.

HKQ Law’s estate planning attorneys can help answer that question. We’ll determine which type of trust or other asset protection tool best meets your specific needs. Countless clients have put their trust in us. Call us at 570-287-3000, or find us online at www.HKQLaw.com.

About Hourigan, Kluger & Quinn, PC

Hourigan, Kluger & Quinn is considered one of the top civil litigation and commercial law firms that has had the privilege of representing more families in the courtroom than any other NEPA firm. The attorneys at HKQ Law have been honored as Super Lawyers, Best Lawyers, Best Law Firms by US News and World Reports, and have received the AV Preeminent Rating by Martindale-Hubbel. HKQ Law was recently recognized for one of the top 20 Verdicts in Pennsylvania.

The firm’s Personal Injury Team, led by Attorney Joe Quinn, Jr., has won some of the largest verdicts and settlements in the region's history, totaling over a half billion dollars on behalf of injured clients. The Personal Injury Team focuses on a wide array of personal injury claims and civil litigation, including medical malpractice, auto and truck accidents, aviation accidents, unsafe vehicles, dangerous or defective products, workplace injuries (worker's compensation), construction site accidents, claim denials by insurance companies, dangerous drugs, defective children's products, nursing home abuse and neglect, and falls due to unsafe conditions (slip and fall).

Attorney Joseph A Quinn, Jr. is one of only 100 attorneys in the United States (and one of only three in Pennsylvania) honored with membership in the Inner Circle of Trial Advocates, and one of only 500 attorneys worldwide chosen to be a Fellow of the International Academy of Trial Lawyers. He has been a Pennsylvania Super Lawyer every year since the program began and has been listed in The Best Lawyers in America every year since the publication was established in 1987. Best Lawyers also named him top personal injury attorney for Northeastern Pennsylvania and the Lehigh Valley. In addition, Best Lawyers, in conjunction with U.S. News & World Report, has designated HKQ a Tier 1 Best Law Firm for personal injury and medical malpractice litigation in Northeastern Pennsylvania and the Lehigh Valley.

Since the inception of the firm, the Commercial / Corporate Team led by Attorney Allan Kluger has provided comprehensive, integrated legal services to many of Northeastern and Eastern Pennsylvania's largest corporations, businesses, banks, non-profits and institutions, handling matters involving labor and employment, wills, trusts and estate planning, estate administration, elder law, commercial transactions, residential and commercial real estate, zoning, land use and development, telecommunications, mediations and arbitrations, commercial litigation, title insurance, business planning and business succession, corporate/business structuring, employment discrimination law for employers, banking, creditor’s rights, finance, lender liability defense, covenants not to compete, construction law, mergers and acquisitions and other business matters.

Additional information can be found at www.HKQLaw.com or by calling (800) 760-1529.

				

 

Before you go, would you like to have your inquiry reviewed by a member of our team?

Yes, please.

No thank you, I'm just browsing

For Immediate Response Call:

(800) 760-1LAW(1529)


Back to Top