Trusts are used to pass down assets to beneficiaries, protect those assets from over taxation and creditors, and to ensure that the assets you do leave behind are used in a manner of your choosing. There are many types of trusts to accomplish these goals, and choosing the specific trust or trusts that meet your goals can be tricky. The trust attorneys at Simms Showers LLP can help you decide what trusts work for your needs, and then create those trusts so that you have peace of mind for the future.
The Basics of a Trust
There are three parties in every trust: the trustor is the person who creates the trust. The trustee is the person or party who holds the property. And, the beneficiary is the person the property, assets, or title is for.
A revocable trust can be altered or revoked during the grantor’s lifetime. As such, these “living” trusts are the most common type of trust. They can be used to distribute assets and avoid probate. Avoiding probate is one of the main reasons to create a revocable trust. Probate is the official proving of a will, and it generally takes over six months to complete before assets can be distributed. Probate can also eat up to 15 percent of the assets in a will. If you have less than $50,000 in assets, according to Virginia Courts your will probably does not need to go through probate. However, many people have more assets than this. And, considering the average home value in Virginia is over $285,000 according to Business Insider (real property must pass through probate), there is a good chance that you will benefit from bypassing probate by using a revocable trust.
An irrevocable trust cannot be modified or revoked after it is created. Once the trust is created and funded, the assets in the trust technically no longer belong to the trustor. As such, irrevocable trusts are often used to shelter assets from taxes and from creditors.
If you have young children or young grandchildren, a testamentary trust may be an appropriate method to fund their college education, for example. Testamentary trusts are created in accordance with the trustor’s last will and testament. Testamentary trusts only go into effect when the trustor dies. Usually, the beneficiary does not receive any of the property until they reach the age of 18, graduate from college, or marry (for example).
Other Types of Trusts
- Medicaid Long Term Care Trust;
- Qualified Domestic Trust;
- Generation Skipping Trust;
- Marital Trust;
- Charitable Trust;
- Special Needs Trust;
- Bypass Trust;
- Life Insurance Trust;
- Constructive Trust;
- Spendthrift Trust; and
- Totten Trust.
Leesburg & Loudoun Trusts Attorneys
With so many trusts to choose from, estate planning can quickly become overwhelming. To ensure that your assets are protected for your loved ones, we urge you to work with an experienced trust attorney. The trust attorneys at Simms Showers LLP can help you create an estate plan that meets all of your needs. Contact us today to schedule a free consultation.