More Control of Your Funds. More Peace of Mind. Make a Trust a Part of Your Estate Plan.
Trusts work in conjunction with a will so your assets end up exactly where you want them to go. You might create a trust to minimize taxes, protect assets and spare your children from having to go through the lengthy process of probate court. Trusts can make sure that in the event of a sudden and untimely death, your last wishes can be carried out.
A trust makes it possible for you to control not only to whom your assets will be disbursed, but exactly how the money will be paid out. This is a crucial point if your beneficiary is either a child or a family member with questionable ability in handling money. Settling an estate through a will alone may trigger the probate court process, during which a judge, not your children or other beneficiaries, decides who gets what. The probate process can drag on for months or even years, whereas with a trust, much of that delay can be avoided.
Another benefit of setting up a trust is that the entire process remains private, saving your beneficiaries from unwanted scrutiny or solicitation. If you only leave a traditional will, it will be filed with the court to open probate, meaning it becomes a public document that anyone can access.
By creating a trust, you can:
• Determine where your assets are going and when your beneficiaries may access them.
• Prevent your beneficiaries from having to pay estate taxes and court fees.
• Protect your assets from your beneficiaries’ creditors, or from being lost through divorce settlements.
• Direct where any remaining assets will go in the event of a beneficiary’s death. (This is particularly useful in families with second marriages and stepchildren).
• Avoid a lengthy probate court process.
Common types of trusts
There are many types of trusts, each designed to accomplish different goals. Here are a few examples:
Trusts aren’t only applicable after your death. You can also pass on assets during your lifetime through a revocable, or living, trust. A living trust, or inter vivos trust, is a fluid document that goes into effect while the grantor is still alive. Throughout your lifetime, you may change ownership, control assets, and add or remove beneficiaries.
Living trusts are among the most common elements of an estate plan, and a useful option for individuals with even relatively modest estates.
These are a few reasons to consider a living trust:
• You’d like someone else to accept the responsibility of managing some or all your property.
• You want to ensure your business operates with no interruption of income flow in the event of your death or disability.
• You need a way to protect your assets from either the incapacity or incompetency of yourself or your beneficiaries.
• You wish to minimize the chance your will may be contested.
One downside is that, even though a revocable trust usually keeps your assets out of probate, in the event of your death you probably won’t escape estate taxes.
An irrevocable trust is one that, with rare exceptions, cannot be amended, modified, or revoked once it’s created. The written terms of the trust agreement, or the trust’s formation documents, are set in stone as soon as the grantor signs. The advantage is that when you fund your irrevocable trust with money or assets, you automatically provide a way for those assets to move to your beneficiaries, making probate unnecessary. There is no time limit on how long your trust can hold onto the assets. They can be transferred to your beneficiary weeks, months, or even years after your death.
Marital or “A” trusts
A marital trust provides benefits to a surviving spouse. It places assets into a trust when one spouse dies, and any income generated by those assets goes to the surviving spouse. When that person dies, the principal often goes to the couple’s children.
Credit Shelter Trusts
These trusts permit both spouses to take full advantage of their estate tax exemptions. When dollar amounts reach the tax threshold, they are held in a credit shelter trust. The surviving spouse can receive income from the trust’s assets up until death. After this point, the trust’s beneficiaries receive its assets free from estate taxes.
Charitable Remainder Trust
This type of trust grants a given amount of income for beneficiaries for a specific period, with the remainder going to specified charities.
It’s never too early to establish your trust, and it’s wisest to seek professional help. That’s where Asurest’s estate planning attorneys can help. Whether you need a will, a trust, assistance with probate, or a comprehensive plan to cover every issue, our team of legal experts at Asurest can design the best estate plan for you and your family. Our estate attorneys have been serving Richmond and Charlottesville for many years. We’ve made our name by treating every client with respect and compassion. Our goal is to make sure you can rest assured knowing everything is in place no matter what happens.
Give us a call at (804) 805-9220 to make an appointment. We’re also happy to come to you or chat on the phone if you prefer. Your peace of mind starts with Asurest.