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A trust is an arrangement that, after your death or during your incapacity, allows a third party – called a trustee – to hold onto assets for beneficiaries. When establishing a trust, you can specify how and when your assets will be passed onto your beneficiaries.
At Legacy Law Centers, our Leesburg trust attorney has extensive experience and expertise helping clients establish and implement trusts that save their families time, money, and the stress of probate. Let us help you set up a trust that will effectively protect your assets and your family’s future.
Get in touch with Legacy Law Centers today by calling (571) 200-5559.
- Avoiding ProbateTrusts can generally prevent your family from going through probate, allowing them to gain access to your assets more quickly and without paying court fees.
- Flexible Control of Your AssetsYou have the power to determine when and how your assets will be passed on. Revocable trusts also grant you access to assets during your lifetime.
- ProtectionMaybe your beneficiary is not the best at managing money, or maybe your heirs have creditors hounding them for debts owed. Either way, a trust will protect your assets from these situations.
- PrivacyBy avoiding probate, you are also avoiding a publicized court case and public record.
Revocable Living Trusts
A revocable living trust, or revocable inter vivos trust, is an agreement between the person creating the trust, or Trustor, and the person managing the trust's assets, or Trustee. These trusts are "revocable," meaning you can change them over time, and they are "living," meaning they are created while you are alive.
The terms of a revocable living trust provide directions regarding your intentions for the future. When it is created, you act as both trustee and beneficiary while you are alive. Significantly, parts of a revocable living trust may be modified during your lifetime through amendments. A completely revised trust is accomplished through a “restatement.”
A revocable living trust is a convenient, flexible, and protective tool commonly used in estate planning. When you fund a revocable living trust, you can add or subtract assets as you like, change the terms of the trust, and dissolve the trust altogether during your lifetime. You don’t even need to file a separate tax return – the process is quite simple.
Family Bank Trusts
Families with a high net-worth and individuals in high-risk professions such as real estate developers, business owners, doctors, and lawyers can often benefit from a family bank trust (FBT). An FBT offers both asset protection and access.
When a person creates a family bank trust and transfers assets into it, beneficiaries – including a spouse and/or children – have access to the funds. The grantor spouse – the one who created and funded the trust – pays the income taxes on the funds, which provides an additional non-taxable gift.
Benefits of a family bank trust include:
- Beneficiaries’ creditors do not have access to the funds
- Your own creditors cannot seize the funds
- There are no federal estate taxes on assets transferred into the trust or paid on income taxes on trust funds
Rather than superfunding UTMA and UGMA accounts, consider funding grandchildren’s trusts. By using a grandchildren’s trust, you can create a legacy for your grandchildren and prevent them from misusing funds at a young age.
Your grandchildren will benefit from this kind of trust because:
- Your assets can’t be seized in a lawsuit, car accident, medical crisis, bankruptcy, divorce, business failure, or another similar event
- Your assets are protected from estate taxes
- The trust can be dissolved if assets get spent down to pay for education, the formation of a business, or whatever you instruct
Are you interested in establishing a trust for the beloved children or grandchildren in your life? The Leesburg estate planning attorney at Legacy Law Centers can discuss your options and help you decide what kind of trust might be right for you and your family. We serve clients throughout Loudoun County and look forward to helping you protect your family’s future with a trust.