A trust is an arrangement under which a person or institution, called the trustee, holds the title to the property for the benefit of another person called the beneficiary. The person who establishes the trust is called the “settlor” or “trustor.” Often the settlor, the trustee, and the beneficiary will, at least initially, be the same person. There are living trusts, which are set up with an estate planning attorney while a person is alive, and testamentary trusts, which are set up in a will to become effective after a person’s death.
A trust that is established while you are still living and created for the lifetime management of the property is known as an intervivos or living trust. The trust can be revocable, meaning that it can be amended or terminated at any time. The trust can be funded by titling accounts and assets to the trust, or left unfunded, depending upon state law. In managing assets, trusts allow for continuity of management and centralization of record keeping.
A living trust is not subject to court supervision and can be used to avoid probate. Through the use of “spendthrift” provisions, when the beneficiary is not the settlor, it has the potential of protecting assets from the claims of creditors of the beneficiaries.
BENEFITS OF ESTABLISHING A TRUST
A trust is an effective method for providing for asset management and protection of resources in the event of illness or incapacity. It is a particularly useful tool for larger estates with multiple or complex assets or where there is no close family member available to act as an agent.
The following trusts can be used to minimize or avoid taxes:
- Life insurance trust
- Charitable remainder or lead trust
- Personal residence trust
- Settlor retained income trust
- Qualified terminable interest property trust (QTIP).
LOOKING FOR A NORTHERN VIRGINIA TRUSTS ATTORNEY?
Not only can Hale Ball Carlson Baumgartner Murphy, PLC provide you with thorough knowledge in the law regarding the various trusts in Virginia, but we can assist you with creating one that meets your unique needs. Let our lawyers put their nearly 50 years of collective experience to work for you.
Whether you wish to create a living trust or incorporate one into your will, now is the time to begin the process. Contact us to create a trust that keeps your family and assets protected!
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