Estate planning: safeguarding your assets - Madigan and Scott Inc - Estate Planning LawyerBenefits Of Estate Planning In Virginia: Protecting Assets While Alive

Contrary to popular belief, estate planning isn’t solely concerned with how your assets are handled after you pass away; it can actively provide protection and benefits while you are still alive. One avenue through which you can enjoy this is through the use of specific types of trusts, particularly irrevocable trusts.

Placing all assets into such a trust creates a protective barrier, if you will. In the event of legal action, accessing assets within an irrevocable trust becomes a considerable challenge for creditors. While it’s not necessarily a 100% guarantee, the complexities involved often act as significant deterrents, serving as a welcomed layer of security.

There are some trade-offs, however. When you establish a trust, you essentially create a distinct entity separate from yourself. Despite this separation, you retain control of your trust as the trustee. This allows you to manage and allocate assets as you wish. This control becomes crucial in navigating the balance of controlling the assets in the trust despite it being a distinct entity from yourself, especially when faced with potential legal challenges.

Although a trust provides you with a shield in some ways, determined debt collectors can nevertheless still employ legal tactics in an attempt to render this protection null. The effectiveness of trusts in asset protection is, therefore, subject to various factors and should be approached on an individual basis. Each case requires a careful consideration of your personal goals and the specific assets or interests you aim to safeguard.

The Significance Of Estate Planning In Virginia

Estate planning is a tool that allows you to exercise control over the destiny of your assets. Growing up, I often heard that wills and trusts are a person reaching out from the grave and touching someone. This has far-reaching implications, but as true as this may be, estate planning is more than that. Creating a trust, for instance, enables you to specify that your children won’t inherit their share of the estate until they reach a certain age. This becomes particularly important when dealing with minor children.

Imagine what might happen if you were to hand an 18-year-old a substantial sum of money. Drawing from personal experience, if I had received a significant inheritance at that age, I might have indulged in impulsive spending like buying a Corvette, going on vacations to exotic places, and otherwise squandering it. For this reason, I often advise clients to use certain benchmarks when setting up their trusts.

At 18, when many young individuals are transitioning from high school to trade schools, jobs, or college, you can use a trust to provide for their health, education, and welfare needs. At 24 or 25, when they’ve likely completed their education and are starting their careers, another portion can be allocated for setting up their lives, arranging a place to live, or acquiring necessary tools for their profession.

A key piece of advice I generally offer is to reserve the remainder of the trust until the child reaches around 35. This age often aligns with milestones like marriage, starting a family, and the desire to purchase a home. Providing the balance of their share at this point empowers them to make significant life decisions, such as securing a home or investing in assets for their growing family. This scheduled distribution prevents the risk of the child draining resources when young, ensuring that the financial support you wish to give them is timed to meet their needs and responsibilities at an appropriate time and when they’ve matured.

The Sooner, The Better: The Ideal Timing For Estate Planning

The best time to begin estate planning is undoubtedly now. Estate planning often takes a back seat in people’s priorities, largely fueled by an underlying fear — fear that contemplating one’s estate means facing the reality of death head-on.

In my practice, I’ve encountered many who are guilty of this. It’s as if the act of creating a will or considering the fate of their assets after their death is an acknowledgment of the end itself or possibly even a means by which they will bring about their own death! The irony, however, is that avoiding these conversations doesn’t do anything other than leave the distribution of your estate to the Commonwealth of Virginia!

When you procrastinate on estate planning, you essentially give up control over the fate of your assets, and the state steps in. In Virginia, the laws dictate how your estate will be handled without a personalized plan, often resulting in outcomes that are not satisfactory for most people. The sooner you engage in this process, the more control you retain over your assets and the more satisfaction you can derive from knowing that your wishes will be honored.

For more information on The Benefits Of Estate Planning In Virginia, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (703) 775-1678 today.

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