The process of preparing for the final stages in your life with an estate planning lawyer is critical, as it focuses heavily on what will be done with your assets. The Law Office of James D. Fife in Arlington, Virginia provides thorough, effective legal counsel when it comes to figuring out your estate planning objectives and ensuring you have the right paperwork filled out. Whether you’re an individual or a small business, our team can help answer all your questions when it comes to this area of law. Browse all our frequently asked questions below and reach out to us today for more information!
When Can You Establish a Trust?
A person may establish a trust that becomes effective during his or her lifetime or a testamentary trust, which becomes effective following his or her death. A living trust is a trust that becomes effective during the lifetime of the person who creates the trust.
What Kinds of Trusts Are Utilized in Estate Planning?
A wide variety of trusts are used for estate planning purposes. Trusts utilized in estate planning include many kinds of testamentary trusts and numerous types of living trusts. A living trust may take the form of a revocable trust, which may be revoked by the person creating the trust, or an irrevocable trust, which may not be revoked.
How Do You Create a Living Trust?
A person may create a living trust by transferring property to a person who agrees to serve as trustee and comply with the terms of the trust. The person who creates the trust may be referred to as the “settlor” or the “grantor.”
Does Transferring Property Into a Trust Change the Ownership?
The transfer of property to a trust causes a change in the legal characteristics of ownership rights in the property. Before the settlor transfers property to the trust, he or she owns all of the rights and has all of the obligations associated with the property. When the property is transferred into a trust, the rights of ownership in the property are divided into two different interests: the legal interest, held by the trustee, and the equitable interest, held by the beneficiary.
The trustee has the power and authority to control the management and disposition of the property. The trustee normally has the power to sell trust assets, the power to purchase investment assets with trust funds, and the power to distribute trust assets to the beneficiary in accordance with the terms of the trust. The trustee is obligated to exercise his or her powers for the benefit of the beneficiary.
What Are the Rights of The Beneficiaries?
The beneficiary has rights relating to the use, possession, and enjoyment of the trust property. Trust provisions require or permit the trustee to distribute trust funds directly to the beneficiary or make payments of trust funds in a way that benefits the beneficiary. A beneficiary is generally entitled to sue a trustee who acts improperly and can take other action that may be necessary to protect trust assets.