Planning for the future is important, and people generally want to be able to plan for the future financial security of their families. Wills and trusts are instruments that people can use to protect and facilitate the transfer of their assets in case the unexpected happens. These are instruments that are useful in estate planning, and should be part of each personâs overall financial plan. Without these tools, the state will decide where your assets will go after death, and most people want to ensure that their wishes are carried out accordingly.
If you are seeking to have a will or trust created in the Virginia Beach area, including Norfolk and Chesapeake, you should consult with a seasoned estate planning attorney. The Cedar Law Center can provide you with sound legal counsel and help you draft these instruments to ensure that your assets and familyâs financial future are secure.
Wills vs. Trusts
There are important differences between wills and trusts, and each individualâs needs should determine the proper instrument for the situation.
â¢ When it goes into effect.A will goes into effect only after the individual who created the will passes away. It is an instrument that directs who will receive a personâs property upon his or her death and appoints a legal representative to carry out that personâs wishes. Va. Code Â§ 64.2, Chapter 4 outlines the statutory requirements in Virginia governing the validity of wills, how wills are construed, and other will-related provisions.
Trusts, on the other hand, are instruments that can be used to transfer property prior to a personâs death, at his or her death, or thereafter. It is a contractual arrangement through which a person or institution, called a âtrustee,â holds legal title to property on behalf of a beneficiary. Usually, a beneficiary either receives income from the trust during his or her life or receives whatever is left over after the first set of beneficiaries dies.Va. Code Â§ 64.2, Subtitle III outlines all of Virginiaâs statutory requirements for establishing and administering trusts.
â¢Covered property. A will covers any property that is solely owned by an individual when he or she dies. It doesnât cover any property that is held jointly or in a trust. A trust, however, covers only property that has been explicitly transferred to the trust and placed in the trustâs name. Once transferred, the property is no longer owned by the individual â it is now owned by the trust. Individuals can establish living trusts and transfer assets to it immediately once the instrument is completed. If the living trust contains all of the individualâs property, then a will is unnecessary. However, if a trust only contains part of the personâs property, then he or she may choose to either include a provision to transfer the remaining property into the trust upon death or create a will to distribute remaining assets not placed in the trust upon death.
â¢When it is validated. The primary difference between wills and trusts is that wills have to go through probate. It is the legal process in which a court transfers property from the estate to the beneficiaries. Courts have to examine whether a will is valid, pays creditors from the proceeds of the property, and supervises the process of transfer to ensure that property is distributed according to the will.
Trusts, however, do not go through probate. Trusts continue to hold properties transferred after death without any court supervision. Trusts can hold an individualâs assets while they are living, but because trusts are governed by a written instrument, people can still have access to their assets during their lifetime. Trustees, who are appointed to hold and manage the property for the benefit of the grantor, are required to divide whatever is left to the beneficiaries according to the trust instrument.
The Cedar Law Center in Virginia Beach is dedicated to creating sustainable legal solutions for its clients. We have years of experience in estate planning, administration, and probate in Virginia Beach, Norfolk, and Chesapeake. If you are trying to decide whether a will or a trust works best for your circumstances, please contact us so we can provide you with expert legal counsel and help you determine the best instrument for you to use to protect your hard-earned assets. You may reach us by calling (757) 963-7788 or by completing our online contact form.