Estate planning, including the creation of a trust, is important for everyone in Virginia, not just for those who are wealthy. When a trust is created, a grantor transfers their assets to a trustee. A trustee is in charge of managing the trust property for a beneficiary in accordance with to the terms of the trust created by the grantor.
Often, a trust will also specify a successor trustee, which ensures that the grantor's assets will continue to be managed in the event the grantor becomes unable to manage his or her financial affairs. In many cases, a successor trustee is a spouse, child or other trusted family member of the grantor.
In addition, trusts are valuable because they allow a grantor of assets to exert control over how their funds will be used even after their death. For example, a trust can be created to fund only educational expenses, for example. The beneficiary of the trust will be prevented from using the grantor's assets for any other purpose.
Furthermore, a trust can provide asset protection when a grantor has beneficiaries who have special needs or who may be prone to financial mismanagement. A trust is different from a lump sum gift, because the trust's assets can only be used for specific purposes outlined by the grantor.
There are a number of different types of trusts, though all trusts have a few things in common. They don't go through probate, they can be set up to reduce tax consequences, they allow the grantor to have more control over the disposition of their assets and they can accomplish goals that a will alone cannot address.
Source: Seacoastonline.com, "Money Talk: Trusts are not just for the wealthy," David T. Mayes, March 11, 2012