A Trust is one of the most valuable tools in Estate Planning. It can safeguard your assets and allow a seamless transfer to beneficiaries upon your death. It also avoids Probate if set up correctly, so a costly and lengthy legal process doesn’t burden your family.
Establishing a Trust requires careful planning and consideration. Below are five questions you should ask while forming your Trust.
What Are the Legal Requirements for Setting Up a Trust?
Whether you create a Revocable or Irrevocable Trust, meeting the requirements under Commonwealth law is crucial. Otherwise, it won’t be valid and legally enforceable.
The conditions you must meet to set up a Trust include:
- Mental capacity – You must be of sound mind to establish a legally enforceable Trust. That means a cognitive illness or impairment does not diminish your mental capacity.
- Intent – You must intend to form the Trust. That means you must understand what you’re doing while drafting the agreement and the consequences of your actions.
- Named beneficiary – You can’t be the sole trustee and sole beneficiary. You could be one of several beneficiaries, but you cannot be the only one. The beneficiary you choose will receive the assets held in Trust when you die. Beneficiaries also aren’t required to be people. You can name a pet, company, or charity.
What Assets Should I Place in Trust?
Consider taking inventory of all the assets in your Estate Plan. You can transfer multiple assets into a Trust during your lifetime, such as:
- Insurance policies
- Bank accounts
- Stocks, bonds, and other investments
- Real estate, including a primary residence, rental property, and land
Who Does the Trust Benefit?
A Trust can benefit surviving family, friends, and organizations. You should think about the people in your life you want to care for when you die. That might be your spouse, a minor or adult child, a sibling, parents, or a close friend.
With a Revocable Trust, you can transfer and remove assets during your lifetime. You can also revoke it before you die. Decide what type of Trust you want and who should be your beneficiaries. You can choose more than one and leave instructions for how the assets should be distributed between them.
Who Should Be My Successor Trustee?
Often, the person who forms a Trust is also the trustee. You can appoint a successor trustee to manage the Trust after you pass away. They are responsible for transferring assets to designated beneficiaries according to your instructions.
Your successor trustee should be responsible enough to handle the duties and fulfill your wishes. They must be honest and able to manage your Trust without using your assets for personal gain.
Will My Family Fight Over My Estate?
Family dynamics play a significant role in Estate Planning. Think about ongoing feuds or common conflicts among family members. If they often fight over money or worry about their place in your Estate Plan, a Trust can mitigate the risk of legal disputes.
Get Help Setting Up Your Trust Today
You should consider whether a Trust suits your needs and offers the protections you want. You can safeguard your assets and ensure your family’s financial future long after you’re gone. However, you should not establish a Trust without hiring a Virginia Beach Estate Planning Attorney from Anchor Legal Group, PLLC.
We can advise you of the available Trust options and guide you during the complex set-up process. You can count on us to help you establish a Trust that benefits everyone involved.
Call Anchor Legal Group, PLLC at (757) 529-0000 for a confidential consultation with an experienced Estate Planning Lawyer now to get started.