The owner of an estate can place assets into a trust and assign a trustee to manage it for a beneficiary. The guidelines for how the assets are to be managed and taken care of will be detailed a written document referred to as the trust document. It is a convenient legal mechanism for an individual to use if he or she will not be able to manage the property in the future. However, Pennsylvania residents who are considering using a trust as part of their estate planning should be aware that a trust will eventually end.
There are multiple ways a trust can end. The simplest way is when the assets in the trust have been exhausted. If the trust contains financial assets, such as stocks or cash, this can occur when all of the funds and interest have been paid to the beneficiary. If the trust holds real estate, like a home, it could come to an end if the property is destroyed. The grantor, or the owner of the property who created the trust, can also specify an end date or condition for which the trust should end.
If there are still assets in the trust and no instructions were provided by the grantor regarding what should happen to the remaining assets after the trust ends, the beneficiaries and trustee must work together to distribute the assets. An attorney who practices estate planning may be consulted to ensure that the rights of all parties involved are protected.
A lawyer could help a client understand the appropriate type of trust to use. An attorney may also assist with drafting instructions for the management of the assets that are placed in the trust.