Through a trust, you are able to maintain full control over which beneficiaries receive certain funds or property, all while bypassing the lengthy and occasionally stressful probate process in the U.S. Virgin Islands. The following are some of the most common types of trusts:
- Revocable trusts: You may modify or completely revoke these trusts at any time. Also commonly referred to as “living trusts,” you are able to transfer any assets you wish to the trust. When you pass away, your beneficiaries will be able to receive those assets without having to go through probate.
- Irrevocable trusts: Once established, these trusts cannot be modified. Once assets are placed in the trust, they are permanently owned by that trust until the time comes for them to be passed to the beneficiaries. Irrevocable trusts are often used as a tool to help avoid or minimize estate tax obligations.
- Charitable trusts: If you wish to leave money or assets to a specific charity or cause, you may establish a charitable trust. These trusts also have the added benefit of significantly reducing or eliminating estate taxes.
- Special needs trust: If you have a loved one with special needs, you may establish a special needs trust to ensure that person still is qualified to receive government benefits. The beneficiary is not allowed to control how often trust benefits are distributed or in what amount they are distributed.
- Asset protection trust: These trusts help to protect your property from claims from creditors. If you know you have creditors who are going to attempt to go after your assets, this can help your friends and family members avoid the hassle of dealing with them, while also giving you greater control over your assets.
- Spendthrift trust: These trusts ensure your beneficiaries will not either promise away or sell any of their interests in the trust. All assets placed in this type of trust are protected from creditors of the beneficiary, at least until the trust’s assets are distributed.
All of these trusts are legitimate and helpful estate planning tools that provide you with greater control over your assets and property. The type of trust you choose, of course, depends on your own personal financial and estate situation. Individuals with larger estates are more likely to take advantage of trusts that help minimize their estate tax burdens, for example.
For further guidance and advice on selecting and establishing the best trust option for your needs and situation, reach out to a skilled estate planning attorney. Remember, it’s never too early to begin this process.
Tom Bolt is an estate planning attorney with BoltNagi PC, a widely respected and well-established estate planning law firm serving clients throughout the U.S. Virgin Islands.