The issue of passing on assets to loved ones at the time of an individual’s death can be a sensitive topic, but one that is important to broach. Which is why individuals are encouraged to create an estate plan, even if they are not nearing the end of their life or do not currently possess a significant amount of assets. As part of an estate plan, two important elements should be considered: a will and a trust.
What Is a Will?
A will, also called a Last Will and Testament, is an essential building block of an estate plan and is the type of estate planning document that individuals are most familiar with. Wills are important because they can be used to accomplish a variety of objectives, including:
- Name a guardian for minor children;
- Name an executor of your estate;
- Leave property to various organizations, charities, or people;
- Specify your wishes for how debts are to be paid;
- Give instructions for how you want certain property managed and distributed, such as a family business.
Another benefit of a will is that even if you form one today and in 10 years your life looks very different, you can amend your will at any time to account for these changes.
If you die without a will in Virginia, your property will not be distributed per your wishes; instead, your estate will be subject to the state’s intestacy laws, which will divide your property according to guidelines set by the state (first amongst a surviving spouse and children).
What Is a Trust?
Many people think that if they have a will, their estate plan is complete and they don’t need to worry about creating any other estate planning documents. However, the most comprehensive of estate plans will include myriad elements, and a trust is one such document that is worthy of consideration.
The creation of a trust is another method of transferring assets in an estate to beneficiaries; e.g., spouses, minor children, grandchildren, or otherwise. When a trust is created, an arrangement between the creator of the trust (trustor) and a third party, called the trustee, is formed that allows the trustee to manage assets placed in the trust and distribute them to beneficiaries per the trust’s terms.
There are several benefits of a trust, including the ability to control the terms and conditions (the trustor can decide how and when assets should be distributed, and for what purpose), mitigate estate taxes, protect assets from creditors, and maintain privacy. The latter is true because assets that are held in a trust will not be subject to probate at the time of your death, whereas a will does pass through probate, and the probate process is part of the public record.
There are many types of trusts. Before you form one, it is best to consult with an experienced estate planning lawyer who can advise you regarding specific trusts and guide you based on your financial goals.
Forming Estate Planning Documents
Individuals who have accounted for all of the various assets they own through the creation of both a will and trust may benefit from peace of mind in knowing that their loved ones will be provided for at the time of the individual’s death, and that their estate will be managed per their wishes. One type of estate planning arrangement is not superior to another; wills and trusts do different things, and each has their own advantages. What’s more, both wills and trusts are relatively inexpensive to create, and modifications can be made later on if circumstances change.
Call Our Virginia Estate Planning Lawyers Today
Thinking about the end of your life and what will become of your property and assets may not be the most pleasant topic, but it is a topic that is critical to address if you have specific plans for your estate. At the law office of St. John, Bowling, Lawrence & Quagliana, LLP, our Virginia estate planning lawyers can help you create a sound plan for your estate and your family’s future. To schedule a consultation with our legal team today, please call us at 434-296-7138, contact us by sending a message using the intake form on our website, or stop by our Charlottesville office in person at your convenience. Our lawyers have over 110 years’ worth of combined legal experience!