Wills, Trusts & Estates and Special Needs Trusts
Life is unpredictable, and everyone—young and old, healthy and not—can benefit from a carefully written and regularly updated will. A will can ensure that your family has a clear understanding of your wishes in the event of your passing and that your loved ones are provided for. But estate planning does not begin and end with the will, and many people could benefit from trusts as well. For example, if you have a special needs child, you can set up a special needs trust to make sure they are taken care of in the event of your death.
The Virginia family law attorneys at Taylor, Taylor & Taylor, Inc. are here for all your estate planning needs and can help you draft a will or establish a trust that is built around your unique needs and concerns. Contact us today to learn more during an initial consultation.
Establishing a Will in Virginia
A will, often referred to as a “last will and testament,” is a document that provides guidance for surviving family members and directions regarding the distribution of a person’s property upon their death. With a will, you can:
- Name an executor who carries out the directives in your will
- Bequeath and distribute assets to your loved ones and other parties
- Designate a guardian for any minor children you leave behind
- Assign an individual to manage any property left to minor children until your children come of age
In Virginia, if you pass away without a will, you are considered “intestate,” which means that Virginia’s intestacy laws will dictate how your property and assets are distributed. Under Virginia law, the property owned by intestate individuals follows a set course of dispersal.
If you leave behind a spouse or children, they will inherit your property, although the specific division depends on their relationship to one another. If you do not have a spouse or children, the property will go to your parents. If your parents are no longer living, then your property may go to your next closest relatives, such as siblings, grandparents, uncles and aunts, etc. By preparing a will while you are still alive, you can ensure your property goes to the individuals and organizations of your choosing.
You need to be at least 18 years old to establish a will in Virginia, unless you are an emancipated minor. Under Virginia law, you must be of sound mind to establish a will.
The core steps in creating a will in Virginia are:
- Listing your assets (i.e., the property you would like to distribute, including real estate, bank accounts, and personal items)
- Naming the beneficiaries and the assets that each shall receive
- Designating an administrator for your estate (called the “executor”)
- Naming a new guardian to care for any minor children after your death
- Drafting the document and signing it in the presence of two witnesses., who must then sign the will in your presence
While the process of drafting a will can seem daunting, working with an experienced estate planning attorney can simplify and expedite the process.
Establishing a Trust in Virginia
A living trust is a legal, financial arrangement into which you place assets, which then become the property of the trust. When you place assets into a living trust, the trust “owns” those assets, though you can still manage those assets while you are alive. You can put virtually any asset into a living trust, so long as the asset has financial value. Common assets that people place in living trusts include:
- Land and other real estate
- Prized possessions, such as family heirlooms
- Life insurance policies
- Bank accounts
- Retirement accounts
- Debts they are owed
The purpose of a living trust is similar to but distinct from that of a will. This arrangement allows you to distribute your assets and property to named beneficiaries after you pass away. Beneficiaries might include family members and loved ones, as well as organizations and charities. Through a living trust, you can dictate how your possessions should be managed after you die.
To establish a living trust in Virginia, you’ll need to follow these steps:
- Choose the type of trust you want to create — Depending on your marital status, you may want to create either a single trust or a joint trust.
- Review your assets and property — You should list out all of your assets, including property and possessions, as well as bank accounts and investments.
- Designate a trustee — A trustee is the person who manages the trust on the behalf of its beneficiaries, so making this selection is an important decision. While you can manage the trust yourself while you are still alive, you should designate a successor who will manage the trust after you pass away. This person will be responsible for distributing your assets to your beneficiaries, so it’s critical to choose someone you trust.
- Draft documents — Consult with an experienced estate planning attorney to draft legal documents that establish your trust and minimize the possibility that any mistakes are made.
- Visit a notary — You will need to sign the documents in the presence of a notary.
- Add property and assets to the trust — Once you have established the trust, you will transfer assets into it. An estate planning attorney can help you navigate through the process of placing your property in the trust.
Creating a living trust can help streamline the distribution of your assets to your beneficiaries after death. An estate planning attorney can walk you through every step in the process of establishing a living trust.
What is a Special Needs Trust?
A special needs trust is a specific type of trust that allows individuals to set aside assets for disabled beneficiaries to use after the grantor has passed away.
Many people choose to place assets in a special needs trust so that their disabled children or loved ones can use the assets without having their government benefits interrupted. If a special needs individual suddenly inherits a certain amount of money, they may no longer be eligible to receive government disability benefits.
A special needs trust is a way of working around that issue. However, it must be drafted carefully, preferably under the guidance of an estate planning attorney.
Establishing a Special Needs Trust
The main benefits of a special needs trust include:
- Its beneficiaries can still receive government benefits.
- Depending on the circumstances, creditors may not be able to claim funds in the trust.
- Choosing who gets any assets or property left in the trust when the beneficiary passes away.
- Protecting disabled loved one from financial abuse. The person you select to manage the trust—that is, the trustee—has a fiduciary duty to manage the trust in a way that serves the beneficiary’s best interests.
To establish a special needs trust, you will typically need to complete the following steps:
- Choose the type of special needs trust — There are several types of special needs trusts, including first-party trusts and third-party trusts. The main difference between these two is that in a first-party trust, the trust is funded by the grantor, while third-party trusts are funded by someone else, often a family member.
- Designate a trustee — The trustee will manage the funds in the trust on behalf of the beneficiary, so it is vital to choose someone you trust. You can also select successor trustees to manage the trust in the event that something happens to the original trustee.
- Create the trust — To create the trust, you will need to draw up documents, visit a notary, and sign the documents. The wording must be careful and precise, so it’s a good idea to consult with an estate planning attorney.
- Fund the trust — Place assets into the trust which can be used by your beneficiary after you pass away. If the trust is not properly funded, it may be invalidated.
An experienced family law attorney can help make sure each of these steps is followed to the letter, so that your trust is legally sound and your beneficiaries will be cared for after your passing.
How Taylor, Taylor & Taylor Could Help
If you are planning to draft a will or establish a trust, the Virginia estate planning attorneys at Taylor, Taylor & Taylor, Inc. can help you with what can otherwise be a complicated process. Our attorneys are prepared to answer your questions, understand your unique needs and concerns, and help you create an estate plan to meet them.
Contact us today for a consultation.