Pros and Cons of Testamentary Trusts

Trusts can be an effective way to streamline your estate plan. It is important to understand the purpose of different types of trusts to determine which will best meet your needs and goals. Testamentary trusts offer certain benefits, but like anything else, they have drawbacks as well. Experienced wills and trusts lawyers can take a comprehensive look at your assets and circumstances and determine if a testamentary trust may be right for your estate plan.

What is a Testamentary Trust?

A trust is a legal entity that enables a trustee to manage the assets on behalf of the trust’s beneficiary. Typically, living trusts are separate from a will, funded while you are still alive, and then distributed according to your wishes after you pass away. A testamentary trust is created after your death, but you can outline the terms of the trust and name a beneficiary and trustee in your will.

Pros of Testamentary Trusts

Although testamentary trusts can provide some tax benefits, it may vary, depending on your specific situation and the state in which you live. It is vital to speak with estate planning lawyers to see if a testamentary trust may offer tax advantages for your beneficiaries.

Your will can include several testamentary trusts to benefit your children, spouse, or other loved ones. You can include specific instructions about how the funds may be spent and whether beneficiaries can sell or give away their interest in the trust.

Designating someone you trust to manage assets for a minor child or a loved one with disabilities can ensure their inheritance is protected and properly managed. A testamentary trust can also be useful if you have a beneficiary who struggles with addiction or mental health issues.

In addition, you can specify when you want the trust to end or allow the beneficiary to take control of it at a certain age. However, you may set it up to last for the beneficiary’s lifetime and can designate who will receive the assets in the trust if the beneficiary passes away.

Cons of Testamentary Trusts

The major disadvantage of testamentary trusts is that they do not avoid probate. Probate is the legal process in which a will is validated and assets of an estate are distributed. This means that when probate is necessary, funding a testamentary trust can take months. Probate is a public process, so all assets and beneficiaries are part of the public record. Setting up a living trust separate from your will offers a layer of privacy that a testamentary trust cannot provide.

Another potential pitfall is that if your will is contested or there is any confusion about the terms of your will or the trust, it may not be created and executed according to your wishes. Seeking the assistance of probate and estate lawyers can help to ensure you choose the appropriate type of trust for the distribution of your assets.

Regardless of the size or scope of your estate, our experienced business lawyers, residential real estate lawyers, and attorneys who do wills, work collaboratively to help you create an estate plan that protects everyone’s interests.

This blog was originally posted at https://carosella.com/blog/pros-and-cons-of-testamentary-trusts/

Why You Need Business Succession Planning for Your Small Business

Whether you have been in business for decades or you are just starting out, it is never too early or too late to create a business succession plan. The day-to-day operation of a small business takes a lot of time and energy. However, making a plan for what will happen if an unforeseen event occurs or you retire can safeguard the stability of your company and facilitate its continued success. A business succession planning lawyer can help you create a plan that can keep your company stable during trying times.

Help Your Business Survive When Unexpected Circumstances Rise

The COVID-19 pandemic showed that creating effective business succession planning strategies is more important than ever. Unfortunately, things happen that can leave your company without a leader. A sudden death, accident, illness, unexpected resignation, and other issues can lead to turmoil and quickly have a negative impact on your small business. When you have a succession plan in place, less time and money will be spent on scrambling to find external candidates for management positions.

Identify Who May Be Right For the Job

Many small businesses are family-owned, but it does not mean that a daughter, son, or other family member is automatically willing or capable to take over. There may be other employees who are already critical to your company’s success and better suited for leadership. Creating a succession plan allows you to identify employees who have the skills and desire to keep your business running.

If there are certain people you have in mind, talk to them about their professional goals and future plans. Showing that you are committed to promoting staff development for the long haul can improve motivation and employee satisfaction.

Uncover Ways Your Business Can Improve

Business liability lawyers help entrepreneurs mitigate risk by identifying potential problems and areas in which a business can improve. The business succession planning process can help you recognize flaws in your operations and enable you to make changes that can support your financial security and growth.

Address Debt and Provide Tax Benefits

Many small business owners have lines of credit or loans that help keep their companies afloat. If they become incapacitated or pass away, a lender may call in the debt and demand repayment right away. A business succession plan addresses these issues and offers solutions for managing debt repayment.

For example, there may be certain funds or assets that can be used to take care of debt and lines of credit. Outlining this in your business succession plan can make things much easier for your successors and preserve your legacy. A well-crafted business succession plan can also identify strategies to minimize the tax implications of the transfer of ownership or control of a company.

Our multidisciplinary team of experienced business attorneys and wills and trusts lawyers provide creative business succession planning strategies and estate planning services in West Chester, PA.

This blog was originally posted at https://carosella.com/blog/why-you-need-business-succession-planning-for-your-small-business/

How a Lawyer Can Help with Estate Planning in PA

Proper estate planning protects your interests and ensures your wishes are carried out after your death. Regardless of your age or the value of your assets, seeking estate planning services in West Chester, PA can give you peace of mind and ease your loved ones’ emotional and financial burdens at a difficult time.

Estate Planning is More than Just a Will

In addition to drafting a last will and testament, lawyers who specialize in wills can help you create a comprehensive estate plan that is tailored to meet your specific needs and goals. Not only does an estate plan ensure that your assets are transferred to your heirs upon your death, documents such as powers of attorney allow you to name agents to handle medical decisions and financial issues should you become unable to do so yourself.

What Does an Estate Planning Attorney Do?

There are many different facets of estate planning. An experienced attorney should be well-versed in state and federal laws that can affect how your estate will be valued, distributed, and taxed after your death. Trusts can be an effective way to protect your assets and ensure loved ones are taken care of according to your wishes.

If you own a small business, your estate planning attorney may work in concert with business succession planning lawyers to help you create a plan for what will happen to your business if you become incapacitated or pass away.

Your attorney can assist you with a number of things, including:

• Creating a last will and testament
• Drafting a letter of intent
• Drafting an advance directive (living will)
• Drafting powers of attorney for health care and for finances
• Designating beneficiaries
• Appointing guardians for minor children
• Setting up trusts

Your lawyer will take a comprehensive look at your personal and financial circumstances, discuss your concerns, and advise you of your options. Choosing an executor, agents for power of attorney, and guardians for minor children can be challenging. Your attorney can provide an objective perspective that can help you make practical, informed decisions.

Probate and Estate Litigation

If someone dies without a will, it may be up to the probate court to distribute their assets according to Pennsylvania laws of intestate succession. A probate lawyer can guide the personal representative of an estate through the probate and distribution process. When a will is contested or an estate is sued, it is critical to have an experienced estate litigation attorney in your corner. These types of issues can be complex, costly, and may hold up the estate settlement process for months, if not years.

Having an experienced attorney help you create a solid estate plan can help your loved ones avoid potential problems and make sure all your legal bases are covered.

At Carosella & Associates, our wills and trusts lawyers, business lawyers, and attorneys for real estate law work collaboratively to help clients find creative solutions for all types of legal issues. Our dedicated team provides responsive, personalized service you can trust.

This blog was originally posted at https://carosella.com/blog/how-a-lawyer-can-help-with-estate-planning-in-pa/