When planning for the future, it’s important to consider how to best protect your assets and ensure a smooth transition for your loved ones. Instead of making common estate planning mistakes, setting up trusts can provide significant benefits for your children, such as tax advantages, creditor protection, and avoiding probate in Virginia. 5 Rules for doing it right:

 

 

1. Never leave anything to your children when you die

     Instead, leave everything to a trust. Trusts provide significant advantages such as:

  • Tax benefits

  • Protection from creditors

  • Safeguarding assets from divorce claims

  • Insulating assets from lawsuits

Trusts allow your children to benefit from your estate without direct exposure to potential financial risks.

 

 

2. Never put your children's name on the deed to your home to avoid Medicaid recovery

     Placing your children’s names on the deed could expose the home to Medicaid recovery efforts. Instead, I would establish a Medicaid Asset Protection Trust. This trust protects your home, ensuring:

  • The property remains safe from Medicaid claims

  • Your children remain beneficiaries

  • Your home passes to your children without complication

 

 

3. Never put your kids on my bank account

     Adding children to your bank account may seem like a good idea, but it can expose your assets to unnecessary risks like creditors and tax liabilities. Instead, place my accounts in a revocable trust. The benefits include:

  • Retaining control over the account during your lifetime

  • Seamless transfer of funds to your children as beneficiaries

  • Avoiding probate and reducing delays

 

 

4. Never make your kids go through probate

     Probate can be a lengthy and costly process, delaying your children's access to your assets. Instead, create a living trust to avoid probate entirely. This ensures:

  • Quick transfer of assets

  • Privacy, as trust matters aren't part of public court records

  • Fewer legal fees and complications

 

 

5. Never leave the planet without a good plan in place

     The last thing you want your children to face after your passing is the overwhelming task of managing your estate. A comprehensive estate plan that includes trusts will provide:

  • Clear direction on asset distribution

  • Reduced stress and confusion for your children

  • Assurance that all matters are handled according to your wishes

 

 

Conclusion: A Trust is the Key to Protecting Your Assets

     Planning for the future is essential to ensuring that your children are protected and can access your assets without hassle. Trusts provide significant benefits, from avoiding probate to shielding assets from creditors. With the right estate plan in place, you can leave a lasting legacy and make life easier for your loved ones.

If you would like to discuss your options in Virginia, please call one of our offices at 804-325-1245 (Richmond) or 757-941-4298 (Williamsburg) to discuss how our attorneys can be of assistance.

You may also wish to attend our free workshop on estate planning in Virginia at www.smithstrong.com.

 

Special thanks to Wesley Singer for editorial assistance in drafting this article.

H. Van Smith
H. Van Smith
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Trusted Virginia Attorney Serving Richmond to Williamsburg