A living trust in West Virginia allows you to keep your assets in trust during your life while you use and control them. After you die, the assets in the trust are distributed to your beneficiaries as per your instructions. A revocable living trust (also called an inter vivos trust) can be a valuable estate planning tool.
Living Trusts in West Virginia
When you establish a West Virginia living trust, you are the trust grantor and you place your assets into the trust. The assets are managed for your benefit during your lifetime. It is beneficial to place as many assets into the trust as you can, however, some, such as retirement accounts and life insurance, cannot be transferred to a trust. You choose a trustee who will have the responsibility of managing your trust. Most people name themselves for optimal control. You also need a successor trustee in place who will step in after your death to continue to manage the trust and distribute its assets to the beneficiaries you have chosen. A revocable living trust can be altered during your life. It can even be eliminated. An irrevocable living trust can never be changed.
Your living trust West Virginia will keep all of your trust assets out of probate. Probate is the court process that examines a will and approves it. Probate is often a long process that takes months and requires the expenses of an executor, attorney, and court fees. Since West Virginia has not enacted the Uniform Probate Code, its process is not simplified. A trust allows you to bypass these delays and costs and distribute assets to your beneficiaries immediately upon your death if you like. Assets in a will cannot be distributed until probate is over. Your living trust allows you to skip probate in any state in which you hold property, as long as you include that property in the trust.
There is a small estate procedure available that is faster and less expensive than probate. To qualify, your estate must be worth $100,000 or less not including real estate; or your personal representative must be the sole estate beneficiary; or your only beneficiary must be your surviving spouse; or all the beneficiaries must state there is no dispute and the assets cover all the debts of the estate and the executor agrees. If your estate does qualify for this, it is less expensive than a trust, but does not offer a trust’s many benefits.
In West Virginia, a surviving spouse cannot be disinherited no matter what a will or trust says. The spouse is entitled to take a portion of the estate using what is called the right of election. This right of election applies to assets held in a living trust.
Do I Need a Living Trust in West Virginia?
Creating a living trust in West Virginia can be a key component of your estate plan. One primary benefit is the control a trust provides during life and after death. While you are living, your assets are technically owned by the trust, but you continue to use them as you normally would. You live in your home and spend your money without restriction. After your death, you continue to maintain control since the trust must follow your instructions. Assets are protected and managed until such dates as you set for distribution to your beneficiaries. You can choose to wait for distribution, such as for important beneficiary birthdays. Wills do not provide this flexibility and must pass assets once probate is concluded.
Your revocable living trust protects you should you become mentally incapacitated. All of your assets are already controlled, owned, and managed by the trust and a conservatorship proceeding is likely unnecessary. While a durable power of attorney can be rejected, a trust cannot be. Your financial life is protected by the trust.
When you establish a trust, you ensure privacy for yourself and your beneficiaries. The terms of the trust, assets, and beneficiary names remain private and undisclosed. A will must be probated, where it becomes part of the public record. Your trust is also very difficult to contest, ensuring that your wishes will be enforced.
Living Trusts and Estate Taxes in West Virginia
Living trusts do not shield your assets from estate tax, however few people need to worry about this. West Virginia has no estate tax and the federal estate tax applies only to estates worth more than $5 million. It is possible to avoid estate tax using a specially created QTIP trust (also known as a marital or AB trust) that passes assets from the deceased to the surviving spouse. Your trust will not protect your assets from Medicaid spend down laws nor will it provide protection from creditors.
How to Create a Living Trust in West Virginia
If you would like to create a living trust in West Virginia, you need to prepare a written trust document and sign it in front of a notary. To put the trust into effect, you must next transfer ownership of assets into it. A living trust can be a valuable part of your estate plan. Consider its benefits and limitations when making your decision.
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