Could a Trust Help New Parents Plan for the Future?

Looking ahead to the future and adding a new child makes it even more important for you to consider how estate planning factors into the big picture. Becoming a parent means taking on a completely new level of responsibility and while it seems like the number of tasks on your to-do list could be endless, it’s very important to ensure that making an estate plan shows up at the top of the priority list.

There are several different things you can do to give yourself peace of mind and confidence that your child is cared for. These include making a will and naming a guardian for your children, buying life insurance, updating beneficiary forms of retirement plans and other documents and considering setting up a trust.

In the event that you were to pass away before your children turn age 18, a trust is an important estate planning document because children cannot directly take control of any inheritance that you leave behind.

The court could end up having to appoint someone to manage those assets that you leave behind to your children and this could also be an unfortunate situation since your new 18-year-old would then have the potential to inherit a lot of property and money. It is far better to ensure that you exercise some level of control by putting together a trust.

This will allow you to determine how your money and property should be used, specifying who is responsible for managing the assets and identifying when your children should be able to receive a transfer of wealth. Schedule a consultation with an experienced Virginia estate planning lawyer to learn more about how trusts can become the cornerstone of your new estate plan.

What Is Settlor Capacity in a Virginia Trust?

There are various rules and regulations associated with what it takes to make a will valid in the Commonwealth of Virginia. Some of these include that the settlor must indicate his or her intention to create the trust, the trust has to have a definite beneficiary, a trustee must be named in the role of managing the trust, and there must be a person named as the trustee to manage the trust.

One other required aspect of establishing a Virginia trust is to ensure that the settlor has appropriate capacity to use this estate planning tool. Settlor is a term used to refer to the person who creates the trust for a beneficiary. The trust will create a trust by splitting property title into different interests and then the settlor imposes fiduciary duties on those newly created interests.

The settlor must have the appropriate mental capacity to create a trust in order for it to be viewed as valid. This means that the settlor must not have any diminished or compromised mental health at the time of creating this document.

The only exception to this rule about a settlor’s capacity is when a trust is created by the settlor’s agent through a power of attorney. In this particular situation, a Virginia estate planning lawyer should be used to ensure that the power of attorney expressly authorizes that agent to create a trust on the settlor’s behalf.

With many different types of trusts to consider using in your estate planning process, a lawyer can help you discuss which of these is best for your situation.

Schedule a consultation with a Virginia estate planning lawyer to discuss the benefits of creating a trust and how to generate and implement one meeting the state regulations.

 

 

What Are the Most Common Types of Virginia Trusts?

Careful consideration and time must be put into the process of establishing a Virginia trust. There are seven main types of trusts that you might choose to use as part of your estate planning.

As a person planning their estate in Virginia, you have many different strategies available to you, including using lifetime gifts, transferring property and putting together a will. Establishing a trust is one of the most important solutions you can use for estate planning needs. Your Virginia estate planning attorney might recommend one or a combination of the following trusts to help you.:

 

  • Revocable or irrevocable living trusts.
  • Ongoing trusts, such as a QTIP, disability or pet trust.
  • Tax saving trusts like a GRAT.
  • Education trusts which is different from Virginia’s 529 plan.
  • Charitable trusts.
  • Family trusts, such as a family pot trust or a child’s trust.
  • Discretionary trusts.

How you choose to decide the best way to protect your estate is up to you and there are many different choices and avenues available to you. The support of an attorney who will work with you based on your personal circumstances and needs can make this process that much easier.

What you select for your Virginia trust will plan on your current status with your estate plan, your overarching goals, and what you hope to accomplish with your estate planning.

What Role Do Your Pets Play in Your Virginia Estate Planning?

You likely view your pets as part of your family and therefore, you want to ensure that they can be taken care of if something were to happen to you. The most elaborate option, but also the one that gives you the greatest peace of mind and control, is to establish a pet trust.Estate Planning for Dogs

How Does a Pet Trust Work?

When putting together a Virginia pet trust, you establish a certain amount of money that is set aside to care for your pets. In addition to creating the trust, you must fund the trust with assets and name a trustee for the management of these funds. The trustee can either arrange for the pets to be taken care of elsewhere or can take care of your pets directly.

It’s important to realize that anyone you choose to establish as a trustee or to name the new owner of the pets should be comfortable with this decision and willing to serve in this way. It can be a difficult family situation when a loved one suddenly passes and leaves a pet without any plans for care, especially if no family member step forward to help.

Make sure that you have discussed all of your options with not just your estate planning attorney, but with your family members as well so that you can make decision that is best for everyone involved, including your pets.

Do you want to put together a Virginia trust to help care for your furry friends? Talk to a Virginia lawyer today.

What Are the Rights of Interested Parties in A Virginia Estate?

Interested individuals is a term that is used to describe the heirs to an estate or the people who have been formally named in a last will and testament as outlined under Virginia law. There are many different common misconceptions associated with interested parties.

One of these includes if an individual is an heir then they are scheduled to inherit from the estate. A person can be named as an heir, but a trust or a will could supersede the passage of any assets going to that individual.

Anyone who is classified as an interested party in a Virginia estate must be kept informed of court required notices and should be notified when a person has been appointed to serve as an executor. A knowledgeable Virginia estate planning attorney can assist an interested person in understanding their role. Just because someone meets the grounds for being classified as an interested person doesn’t mean that they will officially be a beneficiary of the estate. This also does not mean that you are required to be kept informed of all of the details of what is going on with the estate and the assets inside of it.

The person is only entitled to receive notices in accordance with Virginia laws when that notice is required. If you have questions about setting up your estate planning for your future heirs, schedule a consultation today with an experienced estate planning lawyer.  

 

 

What Is the Role of Using A Trust in Virginia Estate Planning?

Most people know that the basic core component of an estate plan is a will, but not everyone understands why trusts can also be a critical component of a clear and comprehensive estate plan. This means you must understand the state rules surrounding wills and trusts, and this process can be explained to you by an experienced Virginia estate planning lawyer.

The role of trusts in the Virginia estate planning process cannot be understated. Trusts serve numerous different purposes, such as saving you money in taxes, providing for controlled wealth for your loved ones, and shielding your assets.

Trusts are a formal arrangement in which a trustee holds and manages income producing assets on behalf of a beneficiary. If you own any assets that are producing income, such as mutual funds, stocks or bonds, a trust could be a powerful tool for you with Virginia estate planning. This gives you financial protection and long term flexibility.

Trusts can also help your loved ones avoid the probate process which is a common reason why many people sit down with a Virginia estate planning attorney. Assets that are formally inherited through a will have to go through the probate court process. This probate process could cost your loved ones money and time after you pass away. Probate courts could even drain your estate by as much as 7% of the value of your assets.

Assets that are placed inside a trust, not just in name but having their title transferred, could help you avoid the probate process altogether, meaning that your beneficiaries can obtain these assets quicker and save money. Sit down with a knowledgeable Virginia estate planning attorney to discuss more about what this looks like in your specific case and why trusts might be beneficial for you as well as your heirs.

 

 

Does A Trust Offer Asset Protection?

There are numerous different reasons why it might make sense to establish a trust for the purpose of meeting your estate planning goals. Far too many people misunderstand how trusts can be appropriately used and this means that the trust never gets funded and therefore is never able to pass on the assets to the intended beneficiaries.

Because of all the complicated issues involved in crafting a trust that addresses all of your issues and is followed through so as to be viewed as valid under state law, you must work with an estate planning lawyer.

One of the most common reasons that people choose to use trust is because these enable asset protection. A revocable trust established during your lifetime becomes irrevocable after you pass away. If the assets are still inside the trust for the lifetime of your children, those assets are protected from litigation that could be filed against your children.

Another good reason to use a trust is because it can help to provide for children from multiple marriages. A trust is an outstanding tool to provide assets for your spouse during the course of his or her lifetime after you pass away, then enabling any remaining assets to be passed on to your children from your first marriage. This helps to protect your children as well as your grandchildren who might ultimately receive your assets.

 

How Does A Trust Help to Prevent Bad Decisions in The Future?

There are numerous different reasons for establishing a trust, especially in light of the constantly shifting nature of estate tax reform. Clients often ask estate planning attorneys, why do really need a trust. It might seem as though the simplest approach is to use a last will and testament to document how you intend for your loved ones to receive materials from your estate.

However, it’s likely that the tax cuts, which have a very high exemption amount, are probably temporary. Planning for incapacity, adding privacy, and avoiding probate are just a couple of the other reasons why you might wish to use a trust.

Trusts can also be used to limit a child’s access to an inheritance or to prevent bad decisions that are made by a surviving spouse. This is because trusts allow for some level of control by the trust creator as far as who receives benefits from the trust and at which point in time.
Employing some level of control is best exercised by putting together and properly funding a trust. Your lawyer should be used to draft this trust.

If you are concerned about the surviving spouse spending too much money on frivolous items and not leaving behind enough for your children or grandchildren, the support of an estate planning attorney is crucial in developing a living trust document that reflects your individual needs.

When Is Your Living Trust Better Than a Will?

Do you only have a handful of documents set up for estate planning purposes? If so, you’re like most people who don’t realize that your will probably doesn’t go far enough to protect your interests. Having a living trust is a great way to incorporate additional planning opportunities into your big picture to ensure that you’ve considered the whole scope of everything. 
In some situations, a living trust is a better place to incorporate these estate planning concerns. Talking a lawyer begins this conversation and ensures that you’ve considered all the factors that belong in your ultimate trust. Once your lawyer has reviewed what you hope to accomplish, you’ll be in a better place to move forward with your entire estate plan.
A living should be a cornerstone of your estate planning toolkit if you fall into any of the following categories:

  • You have a surviving spouse
  • You are a senior with significant assets
  • You have a family to support even after you pass away

There is good chance that you might already have considered the basic benefits of having a will but a will is not enough if you need to accomplish these additional goals. A living trust or revocable trust many be a better tool instead. Living trusts were created specifically to fix the issues that are often tied to a traditional will.
The first thing that makes a revocable trust different from other types of trust is that it can be changed or dissolved base on the wishes of the person who created it. Rather than having your estate go through the process of probate, wherein the court has temporary possession of all of the assets inside, you can use a living trust to ensure a smooth and seamless transition of these assets.
You might be concerned that your final wishes surrounding property won’t be honored with a living trust. However, a trust is stricter than a will when it comes to ensuring that appropriate requirements are met. A trust can also handle more specific concerns that you wish to be carried out on a regular basis.
Another benefit of a living trust is you can establish your inheritor trustee as your power of attorney. To put together a living trust, you will want to first discuss this opportunity with the help of an experienced estate planning lawyer.
 
 

Don't Give Too Much Too Soon in Your Estate Plan

It makes sense that you want to pass on as much as possible to your loved ones. What’s even more important, however, is how you choose to do this. The timing of when you make a gift to a loved one can make a big difference in how your family member is able to manage that resource.

The establishment of a trust is a popular tool for an estate planning strategy but if you’re not careful, it could end up being a big mistake. Putting together a trust when your children are relatively young, such as those under 6, might lead you to think that they can handle receiving large sums of money when they reach age 21 or 25.
It can be a shock for many parents who have already put this plan into place to discover that the children are simply not ready to inherit such a large sum of money. If you’re not careful in how you structure your fund, however, it’s difficult to overturn this when the child reaches these milestones.
Parents should consider delaying bigger portions of a child’s inheritance to allow a trustee to have greater discretion in distributing the money should your child need it sooner. It is not always easy to predict what your child may need in the future, but giving them too much too soon could actually make it more difficult for them to develop into adulthood and to protect their own interests.
Using a trust that has flexible terms and scheduling a consultation with a Virginia Beach estate planning lawyer who can walk you through this process and advise you against some of the most common mistakes is strongly recommended.