Is a Living Trust for You? by Susan H. Confair, Esquire Living Trusts have been widely promoted as the solution to everyone's estate planning needs but few people truly understand what a Living Trust is. A Living Trust is a legal document that, unlike a Will, takes effect during your lifetime and much like a Will states how you would like your assets distributed, names your beneficiaries and appoints someone to oversee the transfer and management of your assets. A Living Trust can be set up and funded during your lifetime by transferring currently owned assets into the Trust such as real estate and investments including stocks, bonds, and mutual funds to name a few. The Living Trust names the beneficiaries of the Trust assets and appoints a Trustee to oversee the management of the assets in accordance with the Trust's terms. A Living Trust can also be set up but not actually funded until your death if you have prepared a "pour over" Will that provides for certain or all of your assets to go into or "pour-over" into the already established Trust at the time of death. In either case, those assets not owned by or designated for the Trust will need to be distributed under the terms of a Will. Just like a life insurance policy that designates a beneficiary, a Living Trust also designates its beneficiaries, and therefore, is not considered part of your assets that will be included in probate. Probate is a court supervised legal process that inventories your assets, validates your Will, distributes your assets in accordance with your Will and provides for the payment of any inheritance taxes that are due to the Commonwealth of Pennsylvania. Probate avoidance is one of the reasons many people find the Living Trust appealing, however, unless all of your assets are in the Living Trust those assets that are not part of the Living Trust will be considered in the probate procedure. For purposes of determining if there is any Federal estate tax liability to the estate, the assets in the Living Trust are considered in that calculation, just like life insurance and certain other beneficiary designated assets. As the probate procedure has become much more streamlined and less costly, avoiding probate should never be the sole reason for establishing a Living Trust. You may wish to consider a Living Trust if you have the following needs or desires: You own volatile assets needing constant attention that a Trustee can provide. You own real estate in two states. You can avoid ancillary probate in the state in which you own real property but are not domiciled. You want a contingency plan in the event of incapacity. As a Living Trust survives your incapacity, your named Trustee can manage the Trust assets in accordance with the terms of the Living Trust which you established prior to your incapacity. This is less risky than having a power-of-attorney because you can set up specific guidelines for your Trustee to follow unlike having to rely on your attorney-in-fact to act as you would. More information on Living Trusts and Wills can be obtained through ' Reager & Adler's Estate Planning Department by calling (717) 763-1383.