Trusts are essential tools that allow one to hold and manage their estate and property efficiently. There are various types of trusts to choose from, like revocable trust, irrevocable trust, living trust, education trust, pet trust, etc. Each of these trusts works differently offers different estate planning solutions. Before starting up a Virginia estate trust, one must be aware of the various options at their disposal. It’s wise to discuss these options with your estate and probate lawyer.
The next step is to draft all the required documents and then fund the trust. Creating a strong trust requires deliberate planning and strategies. To prevent your estate trust from becoming invalid, you must consult a qualified tax lawyer.
So, what are the requirements to draft an estate trust in Virginia?
In Virginia, most trusts are built upon the Uniform Trust Code. Under the Uniform Trust Code, two codes are relevant for creating Virginia Trust.
Va. Code § 64.2-719. Methods of Creating a Trust
The methods of creating trust outline four ways through which the residents of Virginia can form their trust.
One of the methods to transfer the estate to another person is to create a power of attorney. A power of attorney authorizes the agent of the settlor to form a trust on their behalf. The trust comes into effect after the demise of the settlor.
The second method requires the owner to declare that they own identifiable property as trustee. Another approach is to exercise the power of appointment in a trustee’s favor. The fourth option is to form a trust according to Virginia estate planning laws.
Va. Code § 64.2-720. Requirements for Creation
In the requirements of the Trust Creation section, Virginia Trust can only be created if you meet the following criteria.
If the settlor or their agent is capable of creating the trust or the settlor or their agent has an intention to create a trust.
There are certain duties and responsibilities that a trustee named in the trust has to undertake. Additionally, the person named as a trustee is not the sole beneficiary.
It’s worth noting that the requirements of creating a trust can change as per the trust you choose to form. Similarly, the implementation of the trust may also change as per the trust. Thus, it’s essential to consult a qualified trust attorney when going through the process of drafting trust and will.
Now, let’s understand the process of drafting a trust agreement.
A trust agreement is basically a legal document that dictates who the settlor, beneficiaries, and trustee of your newly built trust are. Additionally, the trust outlines how the trust assets will be administrated and distributed amongst the surviving beneficiaries once you pass away.
The trust agreement should have your name as the settlor, the names of all the beneficiaries, the name of the trustee, and how you would want your assets to be managed and distributed.
Although it’s not legally required to sign the trust in front of a notary, it’s usually recommended by estate planning attorneys.
However, if you choose to sign the trust before the notary, make sure you appear before them with an unsigned document.