- posted: May 15, 2018
- Estate Planning
Pennsylvania’s population of adults aged 65 and older has increased significantly over the last 15 years — by nearly 14 percent. As baby boomers become senior citizens, the population of older adults will only grow larger. With more Americans living longer thanks to medical advances, it has also become increasingly important for people to not just consider their future long-term care needs but also other elements of their estate plans, while they still have the capacity to do so.
One of the best ways to secure your wealth and assets for future generations of your family is to establish a trust. There are many different types of trusts, so it can be challenging for those unfamiliar with estate planning to know where to begin.
Below is a brief overview of some of the most common types of trusts, along with some tips for which might be best suited for your situation:
- Bypass trusts: This type of trust is specifically designed to help married couples avoid estate taxes. Each individual who is party to the trust can pass a certain amount of money or certain value of assets to beneficiaries without that money being subject to estate taxes. This is especially beneficial for those who have extremely valuable estates of $10 million or more in value.
- Special needs trusts: If there is a person in your family with special needs who cannot manage finances, a special needs trust will protect the individual long after your death and continue to provide financial support. You can set up this trust in a way that will not interfere with any government support that the person receives.
- Charitable remainder trusts: If you wish to donate assets to a charity after your death, you can start by donating to a charitable remainder trust. This gives you immediate tax deductions for your contribution. You can name yourself as the beneficiary of the income of the trust during your life. The remainder of the trust assets get donated to charity after your death, completely tax-free.
- Living trusts: Living trusts are designed to pass down assets to your heirs without having to go through the probate process. This ensures that all assets you have will be used for your benefit if you become unable to manage them yourself at some point.
- QTIP trusts: A Qualified Terminal Interest Property Trust allows you to avoid a situation in which you pass away, your spouse remarries and some of the property you left for your children goes to your spouse’s new stepchildren and family.
For more information on the different kinds of trusts, their benefits and specific strategies for incorporating them into your estate plan, schedule a consultation with Matthew R. Zatko, Attorney at Law. Call 814-483-7075 or contact us online.