Virginia residents should consider using a trust in their estate plans for a number of reasons. A trust is a legal tool that can be used to protect assets against instances of incompetency, avoid the lengthy and expensive probate process and protect heirs. The expenses associated with establishing a trust vary and can cost as much as several thousand dollars.
One of two main types of trusts is the revocable trust, which is created during a person's lifetime. In situations in which individuals no longer want or need the trust, it can be revoked, and the assets can be transferred back into their possession. While a revocable trust can help avoid the probate process and provide protection against incapacity, it is not useful as a tool to reduce taxes. Also, revocable trusts can be set up to become irrevocable after the estate owner's death.
Irrevocable trusts can be created after an individual's death or during his or her lifetime. The assets that are placed into irrevocable trusts during a person's lifetime are typically not subject to seizure by divorce settlements or creditors. This also applies to assets that are transferred to an irrevocable trust after a person's death.
A trustee or co-trustees can be appointed to oversee the distribution of an irrevocable trust's assets to the beneficiaries. They will have the responsibility of ensuring that the trust assets are not squandered by fraudsters or irresponsible spending.
After considering a client's assets and goals, an estate planning attorney may provide suggestions regarding which type of trust should be used. A lawyer may assist with drafting provisions that ensure that trust assets are managed and distributed in accordance with the wishes of a client. An attorney may also offer counsel regarding other types of estate planning devices to supplement a trust.