When drafting your will, you may be thinking about how you would like to leave an inheritance for your children. Because minor children are unable to inherit gifts of a considerable size, you are able to use estate planning trusts that hold onto your assets until your child is old enough to inherit them.
While there are several types of trusts for estate planning, testamentary trusts are particularly useful for assets that you would like to leave to your children.
No matter which type of trust you choose, it may be a good idea to run it by a professional. Using the services of a capable trust and estate attorney ensures that your trust will be legally sound and your family will not have to worry after you are gone.
Planning that Ensures Your Loved Ones and Property Are Protected
It is never too early to begin trust and estate planning and drafting. Setting up a trust is a good way to be certain that your family has everything they need.
In a testamentary trust, your assets are transferred into the trust only upon your death. These trusts both allow you to leave a substantial gift for your children and appoint a trustee to manage that gift for your children until your children reach an age that you choose.
Different Testamentary Trusts
There are two types of testamentary trusts:
- Separate Trust Shares for Children. If you want everything to remain equal, talk to your trust and estate attorney about separate trust shares for your children. Separate trusts are simply different trust shares created for each child. If, for example, you are married and have two minor children, both you and your spouse can set up separate but equally testamentary trusts for your two kids. When you and your spouse pass away, your estates are split equally into the two separate trust shares and managed separately for each child.
These trust shares act independently of each other, and the respective share is distributed to each child once the child has reached the age that you have chosen for the child to be able to receive the assets outright.
- Family / “Pot” Trust. Sometimes, life is not always equal. Your children have different needs, and the costs for providing for them cannot necessarily be split evenly. To borrow from the first example, say you and your spouse have two children, but one of your children has special needs. That child may need therapy or special equipment, which can cost more than the other child’s basic needs.
A pot trust lets you dictate the spending based on each child’s needs. Your estate planning attorney can help you draw up specific instructions for the appointed trustee to ensure guidelines are established and understood. In a pot trust, all assets in the pot trust are managed and used for the benefit of all of your children. The pot is then split into separate but equal shares only after all of the children have reached the age that you have chosen.
Contact a Virginia Estate Planning Lawyer
At Golightly, Mulligan, & Morgan, our goal is to make estate planning understandable and approachable for our clients. As one of the premier estate planning firms in the Commonwealth of Virginia, we take the time to make each client a priority and ensure their needs are met. If you are looking for an attorney for wills and trusts, contact us today.