Pennsylvania Living Trust

A will takes effect only at death and usually must go through probate, a public court process. A living trust takes effect as soon as you sign and fund it, can be used to manage your property if you become incapacitated, and generally lets property pass to beneficiaries without probate. Many people use both: a trust for most assets and a pour-over will for anything left outside it.

No. Property in a revocable trust is still treated as yours for federal and state estate tax purposes, and you continue to report trust income on your own tax return. More advanced trusts can be used for tax planning, which is a good reason to talk with an estate planning attorney or tax adviser if your estate is large.

Yes. Most people who create a revocable living trust serve as their own trustee, so day-to-day life does not change. You name a successor trustee who takes over only if you become unable to manage the trust, resign or die.

Funding means transferring ownership of your property into the trust. For real estate that typically means signing and recording a new deed to the trustee. For bank and investment accounts, the institution retitles the account in the trustee's name. Property that is never transferred is not controlled by the trust and may still need to go through probate.

Yes. A revocable trust can be amended or revoked by the grantor at any time while the grantor is alive and has capacity. Changes are usually made with a signed written amendment, or by restating the whole trust. In a joint trust, the rules for revoking and amending during both spouses' lives and after the first death are set out in the document.

Most states do not require notarization for a trust to be valid, but having the grantor's signature acknowledged before a notary is common practice. Banks, title companies and county recorders often expect a notarized trust or certification of trust, and some states, such as Florida, require the provisions of a trust that take effect at death to be signed with the same formalities as a will, usually in front of two witnesses. Check the rules in your state, and add the witness blocks if your state requires them.

Married couples often choose a joint trust because it is simpler to manage a single set of documents and accounts. Separate trusts may suit couples with children from prior relationships, significant separate property, or concerns about creditor exposure. In the joint trust created here, the surviving spouse can amend or revoke the trust after the first death, which means the survivor could change who inherits, including the deceased spouse's children. Couples with children from earlier relationships may prefer separate trusts or a plan prepared by an attorney. The right choice depends on your situation and state law, so consider professional advice if you are unsure.

These assets pass by beneficiary designation, not by your trust, unless you name the trust as beneficiary. Naming a trust as the beneficiary of a retirement account can have significant income tax consequences, so many people get advice before doing so.