Virginia now allows qualified self-settled spendthrift trusts, also known as “asset protection trusts” to achieve some protection from creditors. There are some strict requirements which must be met, and not all of the assets may be protected. An asset protection trust may be an excellent legal tool for high-income individuals and those working in a profession where the risk of malpractice suits is high. If you are interested in protecting your assets from future creditors while still benefitting from those assets, an asset protection trust may be appropriate for your estate.
Revocable Living Trusts
A revocable living trust allows you to alter, during your lifetime, who gets your assets when you die – you can update or change the trust as circumstances or your wishes change. A revocable living trust allows you to avoid expensive probate proceedings if you own property in several states, gives the transfer of your personal assets a degree of privacy, puts controls on spending, can help minimize estate taxes, and generally eliminates later challenges to your estate.
Irrevocable Living Trusts
An irrevocable living trust is a useful legal tool for estate and tax considerations. The grantor effectively has removed all rights of ownership to the assets in the trust; the trust cannot be modified or terminated without the permission of the beneficiary. The assets in an irrevocable living trust may include, but are not limited to, a business, cash, life insurance policies, and investment assets.
Irrevocable Life Insurance Trusts
When you purchase a life insurance policy, it is usually with the intention of providing for your loved ones after you die. But depending on the size of your estate, your estate may be subjected to a federal estate tax at a rate of as much as 35 percent, meaning your loved ones may not receive all the death benefits you leave for them. You can protect your life insurance from those estate taxes by creating an irrevocable life insurance trust.
Each type of trust has numerous strengths and weakness, as well as requirements which must be met and restrictions on use. Work with the estate planning specialists at Hook Law Center to ensure that your estate and asset plans are protected.