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Virginia Living Trust Forms – Irrevocable & Revocable

The Virginia living trust is a document created for the purpose of transferring one’s assets in order to avoid probate court once they pass away. Aside from avoiding this lengthy and often costly court process, assets within an irrevocable living trust are protected from lawsuits and creditors and will help minimize estate taxes after death. The person who creates the trust (Grantor) will appoint someone to manage the trust (Trustee) so they can benefit from the property and funds within, and income generated by, the trust. In the event that the Grantor becomes mentally incapacitated, the Trustee will maintain control of the trust in order to benefit the Grantor (who often names himself, among other family members, as one of the Beneficiaries.) Without a living trust, it’s possible that a conservator will be appointed to manage the assets an individual who has become mentally disabled.

Laws – Title 64.2, Part III (Trusts)

Will (Last Will and Testament) – Unlike a living trust, the contents of a will are distributed in probate and will be made public record. Even if a living trust exists, a will should be created in order to assign assets not included in a trust to beneficiaries of the Grantor’s choosing.

Types

Irrevocable – This type of trust is most useful if the intent for creating it is to protect one’s assets. Ownership of assets is transferred from the Grantor to the trust so creditors and claimants cannot get to them as easily.

Revocable – The Grantor retains ownership of all assets within a revocable living trust and can make alterations and adjustments at anytime while they’re alive. Once the Grantor dies, the trust can no longer be changed.

Individual Roles

Grantor (Or Settlor, Trustor) – Person who creates the trust.

Trustee – Person who has control over contents within the trust.

Successor Trustee – Person who attains management over the trust once the Grantor dies (in situations where the Grantor has named themselves Trustee.)

Beneficiaries – Individuals who will inherit assets within the trust once the Grantor dies. Grantor may name themselves a Beneficiary as well in order to benefit from the contents of the trust during their lifetime.

How to Make a Living Trust in Virginia

The requirements for creating a trust in Virginia, under § 64.2-720, are the person creating the trust (Grantor) is of sound mind or their agent under power of attorney has been authorized to do so. The Grantor then names Beneficiaries to inherit assets within the trust once they die. A Trustee is appointed to manage the contents within the trust during the Grantor’s lifetime and after they die. A Successor Trustee should be appointed if the Grantor has named themselves the Trustee. Any property, real estate, stocks, bonds, and bank accounts that the Grantor wishes to protect should be placed in the trust. Although not legally required, it will help the validity of the trust agreement if the Grantor signs the document in front of a notary pubic. 

Real Estate – To transfer real estate into a living trust, the Grantor must fill out either a General Warranty Deed or a Quit Claim Deed.

Motor Vehicles – Transferring a vehicle to a trust requires a Virginia Bill of Sale and a title transfer.

Financial Accounts – It is recommended that ownership of bank/credit union/savings accounts be retitled in the name of the trust. To transfer ownership, the branch manager or account manager will require a copy of the trust document and might ask that the Grantor opens new accounts in the name of the trust, transfer the funds, then close the old accounts.

Stocks and Bonds – Depending on the type of stocks a Grantor owns, either a new stock certificate will have to be drawn up or a brokerage account will have to be opened to act as a depository. It’s best to consult an attorney for this type of asset transfer as it can be a complicated process.

Do I Need a Living Trust in Virginia?

Both a revocable and irrevocable living trust will avoid probate once a Grantor dies; therefore, providing a streamlined distribution process of assets to Beneficiaries. This is also favorable to those who wish to keep the distribution of their estate a private matter. Irrevocable trusts can help protect assets from unwanted creditor claims and lawsuits and, depending on the specific type of irrevocable trust, a person could potentially eliminate estate taxes when they die. Property owned at the time of death is subject to estate taxes, so a person would be wise to transfer as much property into an irrevocable trust to minimize taxes. If a person owns property in outside of Virginia, transferring them into a trust will avoid the probate procedures in each state where property exists.

Even though a living trust will bypass the probate procedure in Virginia, there are still many fees attached to creating a living trust. Those with small estates might find it impractical to set up a living trust. Virginia observes the Small Estate Act which allows a person to inherit property of the deceased outside of probate. If an estate is valued at $50,000 or less, a Virginia Small Estate Affidavit may be presented within 60 days after death of the decedent.

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