A trust is a legal document that helps protect a person’s assets in their estate. These trusts are often used to avoid certain types of estate taxes and provide further legal protection beyond a person’s Last Will and Testament. However, more importantly, in Northern Virginia, individuals can choose from various types of trusts, including Revocable Living Trusts, Irrevocable Trusts, Testamentary Trusts, Pet Trusts, and Charitable Trusts.
A Revocable Living Trust
A revocable trust or a revocable living trust allows for the creator of the trust to continue to make changes to it. This includes changes to the trust’s beneficiaries, the trustee, the property involved, and even the instructions regarding asset distribution.
These types of trusts can last however long the trust’s creator wishes them to last, and they can cancel them at any time. However, because the property remains in the trustor’s ownership instead of being owned by the trust, it will be subject to estate taxes. In addition, if the trust lasts until the trustor dies, it will become an irrevocable trust.
An Irrevocable Trust
An irrevocable trust in Northern Virginia cannot be amended, altered, or terminated after it is created unless certain individuals agree and sign off on any changes. Rather, these trusts are permanent. However, because these trusts serve as the owner of the property placed into them, the state does not impose any estate taxes on them.
A Testamentary Trust
A testamentary trust is a trust that is created as part of a person’s Will. In a testamentary trust, the trust’s creator will leave instructions in their Will detailing how their assets will be managed and distributed. However, because the trust is part of a Will, it will be subject to court oversight. In addition, a testamentary trust only becomes effective upon the creator’s death, which means these trusts cannot be used to manage assets during a person’s lifetime.
A Pet Trust
According to Virginia’s laws, a person can create a trust to benefit their animals. For instance, if a person has a beloved dog, horse, cat, or bird, the owners can make a pet trust which will name the pet’s caretaker and set aside money for the animal’s benefit during their lifetime.
A Charitable Trust
A charitable trust is a trust that is created for the benefit of a specific type of charity, with the trust’s creator determining how the assets placed into the trust will support this charity. These trusts can also protect a person’s assets from gift taxes or estate taxes.
Do You Need Help Creating a Trust in Northern Virginia?
While the above trusts are some of the more common types of trusts in Northern Virginia, they are a small sample of the options you have when it comes to planning for the future. As a result, if you want further information about your trust options or other estate planning tools, contact Ardent Guardian today to get the answers you need and find out how our team can help you.
