Types of Trusts in Virginia
Types of trusts in Virginias are an important and powerful tool that many individuals and families can benefit from incorporating into their estate plans. In Virginia, several different types of trusts can be used to accomplish your particular estate planning objectives. Although different trusts have unique functions, they all contain the same fundamental components such as a settlor, a trustee and beneficiaries. A settlor is the creator of the trust. Speak with a skilled trusts attorney to begin the planning process. They can help you understand the importance of establishing a trust for the future of your family.
Defining A Trustees Role
A trustee is tasked with the administration of the trust and carrying out the trust terms. The beneficiaries receive a benefit from the trust assets. Under Virginia law, a beneficiary may be a person, animal or charity.
Some frequently used types of trusts in Virginia include:
- Revocable Living Trusts
- Irrevocable Trusts
- Testamentary Trusts
- Pet Trusts
- Charitable Trusts
Estate planning attorneys work closely with their clients to help determine the trust that is right for them.
Revocable Living Trusts
A revocable living trust can be amended or revoked anytime during the settlor’s life. One advantage to distributing someone’s estate using a revocable living trust is avoiding probate. In Virginia, any individual who dies owning property in their sole name will be subject to the probate process which is public, costly and time-consuming. By tilting ones assets in the name of a revocable living trust, someone can avoid probate and keep the disposition of their estate private.
A revocable living trust can also provide a mechanism for the management of assets during their lifetime in the event that someone becomes incapacitated and are unable to manage their affairs. If they have young children, a revocable living trust provides a vehicle to manage assets for their children’s benefit in the event that they pass away when they are minors. Trusts can specify the age at which children can receive their inheritance.
What is an Irrevocable Trust?
Unlike a revocable living trust which can be amended or terminated at any time, irrevocable types of trusts in Virginia cannot be altered. An irrevocable trust instrument is permanent. Although Virginia does not impose an estate tax on the state level, Virginia residents subject to the federal estate tax may consider using an irrevocable trust as a tax planning tool to help minimize estate tax liability. As of 2017, the federal estate tax exemption is $5.49 million per individual.
While most types of trusts in Virginia are their own independent legal document, a testamentary trust is created within their last will and testament. Since the trust is part of their will, it is subject to court oversight. A testamentary trust becomes effective upon the death of the settlor. Consequently, this type of trust cannot be used to manage assets during the settlor’s lifetime.
Many people consider their pets to be a part of their family and would like to provide for them in their estate plans. Virginia has enacted a statute authorizing the creation of trusts to benefit animals. Whether the beloved animal is a cat, dog, bird or horse, people can use a pet trust to name a caretaker and set aside money to be used for the benefit of their animals during their lifetimes.
If you wish to incorporate charitable giving into your estate plan, you can create a trust to be used for a charitable purpose or to benefit a specific charitable organization. Some examples of valid charitable purposes include those that support education, art, health, culture or religion. To learn more about what types of trusts in Virginia will help you best accomplish your estate planning goals, contact an estate planning lawyers.