There is a wide range of options for estate planning in Virginia, and in some cases it may be advantageous to go beyond a will and powers of attorney. Trusts can be a very useful tool, so some background information may help you understand the two more common types: Revocable and Irrevocable.
Simply put, a revocable trust is one that can be changed or canceled at any time by the grantor who creates the structure. If you have second thoughts about the person you want to act as trustee or want to change the distribution to a beneficiary, you retain the rights to do so. A revocable trust may be a good fit for your estate plan under certain circumstances.
- Plan for Disability: Your trust assets can be managed by your trustee for your benefit during your lifetime, without the need to go to court to appoint a guardian.
- Avoid Probate: Since the revocable trust assets are not held in your name, but in the name of the trust, the provisions of the trust document govern distribution of assets to beneficiaries. It is not necessary to go through the Virginia probate process.
- Protect Privacy: A trust is a private document, so of the information becomes part of the public record as it would in a probate case. This is not true of a will, which is filed and available for anyone to see.
This type of trust cannot be modified if you have a change of heart later, with very limited exceptions. As grantor, you transfer assets to the trust and relinquish all ownership and control over them. However, there may be significant advantages of an irrevocable trust for your estate plan.
- Estate Taxes: An irrevocable trust removes assets from your estate because you no longer can exercise control or ownership. You give your property over to the trustee to manage for your beneficiaries. Therefore, the value of your assets is not included for estate tax purposes.
- Asset Protection: You know that a creditor cannot reach assets owned by someone else to satisfy a debt, and an irrevocable trust acts in the same way. Plus, assets owned by an irrevocable trust cannot be considered as an available resource for purposes of Medicaid, so you may still qualify for benefits.
Contact a Virginia Estate Planning Attorney About Your Options
Both revocable and irrevocable trusts offer significant benefits in estate planning, and our lawyers at Shannon & Associates, P.C. can help you decide the best fit. Please contact our Chesapeake, VA office at (757) 228-5529 with questions, or check out our website for more information on our estate planning services.