It is no surprise that trusts are among the least understood financial tools, yet today’s most beneficial wealthy management option. Most people think trusts only belong to wealthy families that pass their valuables from one generation to another. The truth is that anyone can set up or reap the benefits of a trust. However, you may need a Virginia lawyer, such as Scott Ives, with the trust litigation and administrations expertise to help you set up a trust.
What is a Trust?
In general, a trust is a legal agreement that allows a trustee to manages trust funds or hold valuables such as properties, bank accounts, money, and business inheritances on behalf of a beneficiary or beneficiaries which can always file for an Inheritance Dispute. In case the death was an accident then the beneficiaries can look for legal help from a wrongful death lawyer to obtain the claims they deserve due to the loss of their loved one. The main parties in a trust include the following:
- Trustor/ settler/ grantor. This is the person that sets up a trust and takes up the responsibility to transfer the assets to reflect the name of the beneficiary
- Beneficiary. The person or institution that benefits from the trust
- Trustee. The person in charge of the trust.
Benefits of a Trust
People set up a trust with the help of professionals from firms like Orlowsky & Wilson, Ltd. because they remain an ideal Estate plan Option to avoid Estate tax. Other benefits of trusts include:
- It is a tool for anyone looking for a way to protect their loved ones after they die
- Privacy. As per estate law, passing assets to beneficiaries through trusts does not involve public probate proceedings.
- Homeowners use trusts to eliminate or reduce federal estate tax
- Saves the beneficiaries from the challenges of lengthy proceedings in the probate court
- A tool for you to control your wealth. You specify the term of your trust precisely in the trust agreement
- Legacy protection. A trust is not subject to misuse or auction by your beneficiaries’ creditors.
Common Types of Trusts
People create different trusts depending on purpose or nuance. Get a Trust Attorney to help you choose the trusts that best suit your goals. The most common types of trusts you can establish include the following:
Living Trust
You can create a living trust during your lifetime and designate a trustee who will manage it after you pass. You can either have a revocable or irrevocable trust. People use the revocable trust to evade probate while alive. The disadvantage with a revocable trust is that it can be altered while the settler is alive, unlike the irrevocable trust. Therefore, there should be a trust protector.
Joint Trusts
These types of trusts are those established for two people. The two exercise control over the assets in the trust while alive. Have trust services to guide you through the process.
Testamentary Trusts
If you want to create a trust within a will, you can choose the Testamentary Trust.
Other types of trust include the following:
- Marital or “A” trust
- Bypass or “B” trust
- Irrevocable life insurance trust (ILIT)
- Charitable lead trust
- Charitable remainder trust
- Generation-skipping trust
- Qualified Terminable Interest Property (QTIP) trust
- Grantor Retained Annuity Trust (GRAT)
Where to Establish a Trust
State laws on establish trust vary significantly. Besides, the quality of representation and suitability of trust legislation also vary. A trust attorney will help you select the best jurisdiction for establishing your trust. You may also seek trust tax consulting services to better understand the tax structure of your trust.
