Estate Planning Services | Trusts
Trusts are not only for the wealthy
Many young parents with limited assets choose to create trusts either during life or in their wills for the benefit of their children in case both parents die before all their children have reached an age deemed by them to maturely handle property. This permits the trust estate to be held by one or more persons, or a corporate trust company or bank, as a single undivided fund to be used for the support and education of minor children, with eventual division of the trust among the children when the youngest has reached a specified age.
This type of arrangement has an obvious advantage over an inflexible division of property among children of different ages without regard to their level of maturity or individual needs at the time of such distribution.
How a trust works
A trust is an agreement under which money or other assets are held and managed by one person for the benefit of another. If you create a trust during your lifetime, you are described as the trust's grantor or settlor and the trust is called a living trust. The provisions of that trust document (rather than your will or state law defaults) will usually determine what happens to the property in the trust upon your death.
A living trust may be revocable (subject to change and terminated by the settlor) or irrevocable. Different types of trusts may be created to accomplish specific goals, and each kind will vary in the degree of flexibility and control it offers.
The benefits offered by trusts include:
• Providing personal and financial safeguards for family and other beneficiaries
• Postponing or avoiding unnecessary taxes
• Establishing a means of controlling or administering property
• Assistance to the settlor in the event of physical or mental incapacity
• Meeting other social or commercial goals
A trust can protect your life insurance payout
If you die without a trust or will, the Commonwealth will distribute your money according to Virginia law. That means minor children will generally need the court appointment of a legal guardian or conservator. However, if the proceeds are payable to a trust, they will be held and distributed in the same manner as other trust assets and may also be free of creditors' claims.
A life insurance trust also keeps your life insurance proceeds from being subjected to federal estate taxes. If you own life insurance you may either (a) designate one or more beneficiaries to receive the insurance proceeds upon your death, or (b) make the proceeds payable to your probate estate or to a trust created by you during your lifetime or by your will.
If the insurance proceeds are payable to your estate, they will be distributed as part of the general estate in accordance with the terms of your will or, if you die without a will, the distribution will be according to the applicable laws.
Insurance plays an important role in estate planning and should be coordinated with all other aspects of your estate plan. Because the laws pertaining to the taxability of insurance proceeds are complex, Alperin Law recommends that your estate planning attorney review all matters pertaining to life insurance.
Annuities and Retirement Benefits
If you have an IRA or are entitled to retirement benefits, Alperin Law can help you decide the various, and sometimes confusing, payment options available and explain the tax consequences of each.
Typically, a deferred compensation or retirement benefit plan will provide for the payment of certain benefits to beneficiaries designated by you in the event of your death before retirement age.
After retirement, you may elect a benefit option that will continue payments after your death to one or more of the designated beneficiaries.
Certain spousal annuities are mandated by law and may be waived only with the spouse's properly witnessed signed consent.
Trusts and Estate Planning
Trusts are an important part of your estate planning and involve many considerations and various legal devices to make sure your beneficiaries receive your money and property according to your wishes. Feel free to call Alperin Law in Virginia Beach at (757) 490-3500 if you have any questions or would like to schedule an appointment.
About Alperin Law
Our law firm provides a wide variety of estate planning services including wills, trusts, advance medical directives, estate planning tools, asset protection, minimize estate taxes, beneficiaries, revocable trusts, irrevocable trusts, life insurance trusts, medical powers of attorney, durable powers of attorney, probate and estate administration, and tax planning. Our estate planning attorneys serve clients in Virginia Beach, Norfolk, Chesapeake, Portsmouth, Suffolk, Hampton, Newport News, Hampton Roads, and throughout Virginia.
For a no-cost phone consultation, feel free to call us at (757) 490-3500 or fill out this form.
