Wills, Estates, and Trusts
Last Will and Testament
A Last Will and Testament (“Will”) is a legal document which conveys a person’s final wishes as it pertains to property after death. A person can leave property to a person, a group or a charity. A Will also summarizes how to handle other things a person is responsible for such as custody of children, bank accounts and investment accounts.
A Will is written while a person is living and their wishes are abided by once they have passed away. A Personal Representative is named in the Will and that person is responsible for overseeing the Estate and is monitored by the Court to ensure that the person’s final wishes in the Will are abided by.
An Estate is opened with the Register of Wills once a person has passed away. The Estate is monitored under the supervision of the Orphan’s Court and by the Personal Representative who has been appointed in the Last Will and Testament. The duties of a Personal Representative usually involve: (1) collecting the deceased’s assets; (2) paying debts, claims and expenses which the deceased owed at the time of death and; (3) paying estate taxes. After all debts and taxes are paid, the Personal Representative of the Estate must distribute all remaining assets according to the final wishes of the deceased as stated in the Last Will and Testament. A Final Accounting must be provided to the Orphan’s Court from the Personal Representative. The Final Accounting provides written proof all debts and taxes have been paid and all assets have been distributed to the heirs and beneficiaries listed in the Last Will and Testament.
There are two types of trusts – a Revocable Living Trust and an Irrevocable Living Trust.
A Revocable Living Trust is a legal document that exists while you are living. A trustee is appointed who manages the Trust and owns the property which you have transferred to the Trust. The Trustee is responsible for managing the property as you direct for your benefit. Upon your death, the Trustee is directed to (1) distribute the trust property to your beneficiaries; or (2) hold the trust property and manage it for the benefit of the beneficiaries. A Trust provides a way for you to manage your property while you are living and it also allows the Trustee to manage the property and use it for your benefit only should you become incapacitated. This Trust avoids the need for having a guardian appointed to handle your affairs.
An Irrevocable Living Trust is a trust which cannot be modified or cancelled once it has been executed. When your assets are transferred to the Trust, your ownership rights are terminated. This type of Trust is typically created to have a certain tax or asset protection result.