Peter L. Klenk, Esq., J.D. LL.M. Tax

By passing the Pennsylvania Trust Act the Pennsylvania Legislature cleared up many outstanding trust questions and also made trusts more transparent for beneficiaries.

One new Trustee requirement is that once the Grantor (the person who formed the trust) has died or is adjudicated incapacitated the Trustee is required to provide written notice with specific information to the “Current Beneficiaries” on or before November 6, 2008. This information will allow the Trustee to monitor his or her rights under the trust and to keep an eye on a trustee that might otherwise operate without supervision.

A Current Beneficiary is defined as:

• A beneficiary who is 18 years of age or older and to whom, or for whose benefit, income or principal must be distributed currently. (Note the word “must”, so if the trustee has discretion to distribute income notice is not required). Or,
• A beneficiary who is 25 years of age or older and to whom, or for whose benefit, income or principal may be distributed currently. (Note the word “may”, so after reaching age 25 the rule encompasses most beneficiaries.)

The new Trust Act changes many long standing Trust and Beneficiary related rules. Becoming familiar with these rules is advisable for all Trustees and for all Beneficiaries. Trustees need to know they are in compliance with the rules; beneficiaries need to know their rights under the trust’s terms and the law.

If you have any questions about this part of the Trust Act, or any other questions about Wills, Trusts, Probate, Living Wills or Estate Planning, please contact me at 215-790-1095 for a no-cost consultation.