While a will is a part of most Virginia estate plans, far fewer state residents have trusts. However, trusts offer many different benefits, depending on the type of trust you establish. There are also many things a will does not do that a trust might be able to help you accomplish.
According to Kiplinger, a trust offers benefits, regardless of whether you have considerable assets or a large, complex estate. Many people choose to include trusts in their estate plans because they help them do the following.
Prevent beneficiaries from blowing their inheritances
If you have one or more children or other beneficiaries who are not responsible with money, you may not want them inheriting a large sum all at once. A trust gives you a way to have a trustee make distributions to beneficiaries based on terms you outline ahead of time. This should help prevent spendthrifts from blowing through what you leave them. For example, you may decide to have your trustee make small distributions every few years, or distributions when beneficiaries graduate college or accomplish other life goals.
Protect beneficiaries’ eligibility for public assistance
Many forms of public assistance, such as Medicaid, require recipients to undergo means-testing to prove need. If your beneficiary receives a sudden windfall when you die because you left assets behind in a will, those assets may disqualify your beneficiary from public benefits programs. However, leaving that beneficiary assets in a trust helps you circumvent this because those assets fall under the ownership of the trustee, rather than your beneficiary.
These are just two of many examples of the types of estate planning goals trusts may help you accomplish.