Roanoke Trusts Attorney
Trusts have become a popular part of Virginia estate plans because they offer additional benefits over a traditional last will and testament. You can separate your assets with a trust that helps pass them on to your beneficiaries once you pass away. There are numerous kinds of trusts, some of which are better suited for specific situations.
One of the most common types of trusts that many people use is the revocable living trust. To learn more about the different types of trusts, and which ones might be right for your situation, speak with the experienced Roanoke trusts attorneys at MichieHamlett Law Firm.
What Is a Revocable Living Trust?
A revocable living trust is one that you, the grantor, creates that can be changed again over time. These types of trusts are used to avoid probate, and they can help protect the estate’s privacy and minimize potential estate taxes. However, they do have some drawbacks and limitations, which is why you want to speak with a skilled Roanoke trusts attorney first.
For one, all income earned by the trust will be taxed on the grantor’s personal tax returns, so it’s like you never transferred the property in the trust. Also, a revocable living trust doesn’t necessarily protect you from creditor’s claims.
Other Types of Trusts
There are other types of trusts available beyond a revocable living trust. The most common reasons to set up a trust are to protect property and reduce or eliminate taxes wherever possible. Other types of trusts we see include:
- Irrevocable Living Trust: These trusts cannot be revoked and take effect during the grantor’s life. They are usually created to transfer wealth, reduce taxes, and protect assets.
- Testamentary Trusts: These are sometimes referred to as a “trust under will.” The deceased’s will will create it once they pass away. The purpose of this type of trust is typically to ensure that special needs beneficiaries are taken care, preserving assets for children from a prior marriage, setting up lifetime income for a spouse, and/or gifting to charities.
- Charitable Remainder Trust: Known as a CRT, this trust is a useful tool for people who have appreciated assets at a low basis, which could be investments like real estate or stocks. When a grantor funds a CRT with appreciated assets, they can sell them without the risk of incurring capital gains tax.
- Irrevocable Life Insurance Trust (ILIT): Families who have amassed some wealth may be interested in an ILIT.
There are dozens of other types of trusts, most of which are irrevocable. When you sit down with a Roanoke trusts attorney at MichieHamlett, we can tell you which trusts are best for your estate planning and financial goals. You should not attempt to create an irrevocable trust on your own without an experienced attorney assisting you. If you should make a mistake, there is no altering the trust.
Contact a Roanoke Trusts Attorney
If you need assistance with creating a trust in Virginia, let the experienced Roanoke trusts lawyers at MichieHamlett Law Firm help. Contact our office today to schedule an initial consultation.