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The most critical components of a proper estate plan are a last will and testament or a trust. Executing a clear and thorough will is extremely important to ensuring your wishes are honored and your family is protected. While a will is certainly a simple way to express your wishes, convey your property, and protect your family, there are technical legal requirements that must be followed for the will to be valid. In addition, numerous financial and tax implications must be considered when drafting a will.
Executing an unclear or undeveloped will can sometimes be worse than executing no will at all. This is because a will’s confusing language or incomplete provisions may result in will contests, estate litigation, and other legal disputes that cost your family time and money and undoubtedly bring about unnecessary pain and stress.
For that reason, it is very valuable to obtain the counsel of an experienced wills, trusts, and estates attorney. A Charlottesville estate planning lawyer at MartinWren, P.C. can help you prepare a clear, thorough, and solid last will and testament. Relying on their years and wide range of experience, the estate attorneys at MartinWren, P.C. can listen to your concerns and desires and prepare a will and other necessary documents to meet your needs.
A will, however, is not the only tool, and, in some cases, is not even the best tool to protect your assets and accomplish your long-term goals. Depending on your estate, a trust may be more appropriate to facilitate your estate. Simply put, a trust is created when property is entrusted to another person to use or care for in the best interests of the owner. The person establishing the trust is referred to as the “trustor,” and the person entrusted with the property and the duties of the trust is referred to as the “trustee.” Any person benefitting from the trust is known as a “beneficiary.”
There are basically two types of trusts: a testamentary trust, which is created through your will and contains provisions to be carried out upon your death, and a living trust, which is created and funded while you are still living.
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Living Trust
There are several benefits to establishing a living trust.
- Probate is Avoided. Because your living trust is a private contract between you (the person creating the trust) and the trustee (the person administering the trust), any assets titled in the name of the trust at the time of your death will avoid probate.
- Distributions to Beneficiaries are Swift. Because your living trust is not required to go through the tedious probate process, your trusts’ assets and property are able to be distributed to the beneficiaries almost immediately.
- Estate Plan Remains Private. Matters of probate are typically public knowledge. Because your living trust does not need to be filed with the court for probate, its contents and specifications are not made public barring a situation where the trustee or beneficiaries engage in a legal dispute requiring judicial intervention.
- Cost to Beneficiaries is Reduced. Typically, the cost to administer a trust is significantly less than the cost of administering your will through probate.
- Allows Careful Planning for Disability or Incapacity. Should you become disabled or incapacitated, a trust will avoid the need for a conservatorship court proceeding to manage your financial affairs. Instead, the trust becomes operational and can specify how your property and care is to be managed upon your incapacity.
Depending on your specific needs and goals, a living trust can be structured as either a revocable trust or an irrevocable trust. Under a revocable trust, the creator of the trust never really loses control of the funds. The trust is funded, but, at any point, the person who funded the trust can retrieve those assets. With an irrevocable trust, on the other hand, the creator of the trust loses control of the funds as soon as the trust is funded. There, the funds are deemed to have passed to the beneficiary upon the creation of the trust, even if the beneficiary has not actually received the funds.
Special Needs
Depending on the specifics of your precise situations, a trust may be the best way to protect your money and direct it to a specific person with a specific need. For example, a trust may be the best choice to provide for a child or loved one with a disability or special needs. Creating a trust allows you to make careful planning arrangements that coordinate all of the legal, financial, and special care needs of your child or loved one.
The two most common types of trusts to address these planning challenges include a Support Type Trust and a Special Needs Trust. In a Support Trust, the trustee is require to make certain distributions for the child’s care including food, shelter, clothing, medical care, and education. A Special Needs Trust continues to provide for the child’s care and support by appointing a trustee to make these financial distributions. The biggest difference between the two, however, is that a beneficiary under a Support Trust is not able to also receive financial assistance through Medicaid or Supplemental Security Income.
The Virginia estate planning attorneys at MartinWren, P.C. are highly skilled in all matters of probate, wills and trusts, business law, and tax law. We can, therefore, provide you with comprehensive legal advice and structure the best estate plan to fulfill your wishes. This may include executing a solid and thorough will or creating a specific trust to achieve your goals while fully protecting your assets. Call either Gregory M. Johnson or G. Raye Jones at MartinWren, P.C. at (434)817-3100, and let us help you find peace of mind as we carefully plan for your future and the future of your loved ones.
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