Different Types of Trusts for Your Estate Plan
A trust is just a legal container for assets that can be used in a variety of ways. It is a valuable estate planning tool for those looking to implement an estate plan. There are numerous types of trusts that can be used to accomplish a variety of estate planning objectives. Different types of trusts have different objectives, but they all operate in the same way. Trusts have components such as a settlor, trustee, and beneficiaries. As Virginia Beach estate planning attorneys, The Law Office of Angela N. Manz acts as your trustee and helps administer the trust to achieve your unique goals. In this article, we will discuss different kinds of trusts and describe why you might want to create them.
Revocable living trusts
A revocable living trust is considered revocable because it can be amended or revoked at any point during the settlor’s lifetime. It is a valuable estate planning tool for distributing your assets in place of a will. Assets held within a revocable living trust are distributed directly to your beneficiaries and do not pass through probate. In Virginia, those who use wills to distribute their assets will require the courts to distribute those assets. The probate process can be costly and time-consuming. Revocable living trusts keep the distribution process private. That means that asset distribution is not a matter of public record.
Revocable living trusts also provide a means of managing your assets should you become incapacitated. This can be beneficial to those with young children. Trusts can specify the age at which a child receives their inheritance, among other benefits.
Irrevocable living trusts
While revocable living trusts allow a settlor to transfer assets into and out of the trust at will, irrevocable living trusts are considered permanent. While you have considerably less wiggle room with an irrevocable living trust, the trust can be used as a means of legal tax avoidance. Those subject to federal estate taxes may consider transferring assets to an irrevocable living trust. The assets are no longer considered a part of their estate for the purpose of taxation.
Testamentary trusts
This type of trust is created within the will of the settlor. Once the settlor dies, the trust goes into effect. Since the trust is a part of the will, it is subject to court oversight. Since the trust is created upon the death of the settlor, it cannot be used to manage assets during the settlor’s lifetime.
Pet trusts
Yes, you can include your pets as part of your estate plan. They are, after all, valuable members of your family! The state of Virginia has a statute that authorizes a settlor to create a trust for the sole benefit of an animal. The trust can be used to name a caretaker and set aside funds for the benefit of the animals during their lifetime.
Charitable trusts
Settlors can name charities as beneficiaries of a trust. This trust is used to benefit a specific charitable organization.
Talk to a Virginia Beach Estate Planning and Trusts Attorney Today
The Law Office of Angela N. Manz can help you create a comprehensive estate plan. Call our Virginia Beach estate planning lawyers today to schedule an appointment, and learn more about different types of trusts you can create.
