While a will is a very useful document that allows you to designate how you want your estate to be divided, it does not protect your family members and loved ones from the probate process. In fact, with nothing more than a will, your estate will still have to go through probate, meaning your heirs could end up losing thousands of dollars due to discharged debts, taxes, and court fees.
Trusts allow you an effective method of helping your heirs bypass the probate process. With a trust, you essentially remove your assets from your estate and place them under the ownership of the trust. You may choose to continue managing your assets as the primary trustee for the remainder of your life. You may also name a successor trustee who will control the trust after you die, as well as beneficiaries who will receive the assets within the trust.
Find out more about trusts when you contact the Fairfax trust lawyers at DiPietro Law Group, PLLC.
What Are the Advantages of a Trust?
As previously mentioned, trusts are an ideal option for those wishing to have their estate bypass the probate process. However, trusts have many other benefits in addition to keeping estates out of probate.
Some of the other advantages of trusts include that they can:
- Protect an estate from tax liability by reducing its overall financial value
- Allow you to distribute assets over a period of time, rather than all at once
- Be kept private and confidential, as opposed to the public probate process
- Let you continue building wealth for your loved ones by investing trust assets
Who Should Create a Trust?
While trusts offer a number of benefits, they are not necessary for everyone. In Virginia, there is a simplified probate process for estates valued under $50,000. If the net worth of your estate will be under this amount when you die, there is generally no need to establish a trust.
However, for any estates valued at over $50,000, a trust can be incredibly useful. Virginia has not adopted the Uniform Probate Code that other states have, meaning probate in our state is often very complicated and drawn-out. This makes it particularly advantageous to establish a trust if your estate is moderate or vast. Furthermore, you may want to establish a trust in order to provide for any heirs with special needs or make sure that certain heirs are not granted a large lump sum all at once. If you own your own business or have significant investment interests, a trust may also be especially beneficial for you. Discuss your situation with one of our Fairfax trust attorneys today to find out if this is the right option for you.
Types of Trusts
There are several different types of trusts. When creating your estate plan, you may wish to establish one or more trusts, depending on your unique needs and goals.
At DiPietro Law Group, PLLC, we can assist you with:
- Revocable Living Trusts: These trusts can be modified or changed at any point during your lifetime. You may even revoke this type of trust completely. With a revocable living trust, you will transfer the ownership of your properties from your name to the trust. Most often, the trust maker serves as the initial trustee, granting him or her the ability to alter the trust or add/remove property from the trust during his or her lifetime.
- Irrevocable Living Trusts: These type of trusts are far less common than revocable living trusts, as they do not allow any changes or modifications once they are finalized. Once you have transferred a property title to the irrevocable living trust, you may not undo this action. In most cases, irrevocable living trusts are used to gift assets while still retaining income from those assets or to help heirs avoid unnecessary tax penalties.
- Special Needs Trusts: Special needs trusts are used to provide for people with special needs without negatively affecting their ability to receive government benefits. In order to qualify for government benefits, special needs individuals must meet certain requirements, including income requirements. A more traditional trust or a sudden inheritance may disqualify a person from receiving these crucial benefits.
- Charitable Trusts: A charitable trust benefits a specific charitable organization, group, or party. It may also be used to benefit the public as a whole. Charitable trusts can be used to lower or avoid estate taxes or gift taxes, ensuring that the charity receives the majority of the intended amount. You may establish multiple charitable trusts as part of your overall estate plan.
Our team can also assist you with unique or unusual trusts. Our estate planning attorneys have decades of collective experience and are here to answer your questions and address any concerns you may have.
Give us a call or fill out an online contact form to schedule a consultation with one of our trust attorneys in Fairfax today.