What Is A Trust?
A trust is a fiduciary arrangement that allows a third party, or trustee, to hold assets on behalf of a beneficiary or beneficiaries. Trusts can be arranged in many ways and can specify exactly how and when the assets pass to the beneficiaries. … Other benefits of trusts include: Control of your wealth.
What Is A Living Trust?
A living trust is one way to plan for passing on your estate—property, investments and other assets—to your family or other beneficiaries. It’s a legal agreement people often use to plan ahead for the possibility of becoming mentally incapacitated or so that the burdensome probate process can be avoided when they die.1 When you die, a living trust can act like a will, even replacing the need for one.2
One type of living trust can shelter assets from taxes, creditors or legal problems. All living trusts are either revocable or irrevocable. They’re created and go into effect while you’re living. The most significant difference between them involves who can manage the trust’s assets and whether the trust’s terms can ever be changed.
When you pass away, you want to be confident that your belongings and property will go to the right people. Creating an estate plan can help you do that, and a trust can be part of it. A trust is a legal entity in which you can place your assets to be used by you or your future heirs. Like a last will and testament, a trust has rules about which assets go to whom and how the assets can be used.
Trusts can also be used while you’re still alive. These are called living trusts or inter-vivos trusts. You may use these types of trusts to, for example, create a fund for your children to access when they reach a certain age.
With another kind of trust — an irrevocable trust — you relinquish your ability to cancel the trust or modify its terms, in return for certain benefits like minimizing taxes or protecting your assets from creditors. Keep in mind that a trust is just one part of an estate plan.
What Are The Disadvantages of a Virginia Living Trust?
- A living trust allows someone to transfer legal ownership of assets to a trustee
- Cost: One of the primary drawbacks to using a trust is the cost necessary to establish it
- More Complex: Trusts are often much more complex to draft compared to wills
- Lack of Tax Advantages
How do I choose a Virginia trust attorney?
If you want to plan your estate but have a complicated financial situation, look for an attorney with a great deal of experience drafting trusts, ideally someone with a tax background as well. You may need to find someone who has knowledge or expertise in multiple areas.