Philadelphia Trusts & Estates Attorneys
Frequently asked questions
Having an estate plan that protects your assets and represents your unique personal interests is one of the best things you can do for you and your family. Click the links below for answers to some frequently asked questions regarding trusts and estates, provided by Richard L. Vanderslice, P.C.
- What are some examples of will substitutes?
- What is a gift and when can one be made?
- What are the duties of an attorney-in-fact?
- Can I revoke a healthcare directive?
- What is a resulting trust?
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What are some examples of will substitutes?
There are a number of will substitutes. Some examples include:
Revocable living trusts — In many jurisdictions, trusts cannot be revoked unless the trustor expressly retains the right to revoke. Revocable living trusts allow a trustor to manage assets, to plan for incapacity, and to avoid probate. The beneficiary of the trust gains interest in the assets during the trustor's lifetime and gains possession upon the trustor's death.
Life insurance proceeds/retirement plan benefits — A trustor can name the trustee of a living trust or of a testamentary trust as beneficiary of his or her life insurance proceeds. However, if the trustee of a living trust is named beneficiary, the trust must exist at the time that the beneficiary is named. These principles also apply to retirement plan benefits.
Totten trusts — Under a Totten trust, a trust-like arrangement is created by a person who deposits money in a bank account and names a beneficiary. Because the depositor owes no duties to the beneficiary, a real trust is not formed. However, upon the depositor's death, the account will not go through probate but will be distributed by the bank directly to the beneficiary.
Spendthrift trusts — A spendthrift clause in a trust prohibits transfers of a beneficiary's interest in the trust. In some jurisdictions, all income interests are automatically given limited spendthrift protection meaning that they cannot be transferred by a beneficiary or reached by his creditors unless a provision is inserted in the trust document allowing such transfers.
What is a gift and when can one be made?
An intentional transfer of property made from the generosity of the transferor is known as a gift. The person who makes a gift is known as the donor. The person who receives a gift is known as the donee.
There are three basic time periods during which a person can make a gift. First, a person can make a gift during life. Second, a person can make a gift at the moment of death (by a transfer conditioned on death). Third, a person can make a gift by will after death.
What are the duties and powers of an attorney-in-fact?
Your attorney-in-fact only has the financial authority you grant him or her in the document creating a durable power of attorney for finances. Generally, an attorney-in-fact has broad authority to:
- Use your assets to pay your everyday expenses and those of your family
- Handle transactions with financial institutions
- Buy, sell, maintain and mortgage property
- File and pay your taxes
- Manage your retirement accounts
- Collect benefits from government programs or civil or military service
Beyond routine financial matters, you may want to authorize your attorney-in-fact to:
- Invest your money in securities
- Buy and sell insurance policies and annuities for you
- Operate your small business
- Claim or disclaim property you get from others
- Represent you in court
Can I revoke a healthcare directive?
If you execute a healthcare power of attorney document and a living will, you can revoke or cancel them at any time. Most states do not require you to revoke the documents in writing. Be aware that if you have told your healthcare provider about your documents, many states require that you inform the healthcare provider of the revocation. It is also important to inform those who know about your documents that you have revoked them, especially a medical proxy if you have named one. Make sure that all people who have copies of your documents return them to you to be destroyed.
What is a resulting trust?
If a trust is not created by a court as a remedy for injustice, a trust is created only according to the express or implied intent of the settlor. The general presumption is that a settlor wants a trustee to manage property for the benefit of a beneficiary.
A resulting trust is a trust created from the implied intent of the settlor. Where a settlor has transferred property but does not intend the transferee to have equitable title, and where the equitable title is not disposed of, the result in the law is that the property is returned to the settlor. There is another presumption. It is presumed that the settlor transferred property to the trust only for the purpose or purposes expressed in the trust and that the purpose was not merely to leave the property with the beneficiary.