A “trust” refers to a legal relationship between three parties: a settlor (also called a grantor or a trustor), who initiates the trust relationship and frequently contributes the property to be governed by the trust agreement; the trustee, who holds legal title to the trust property; and beneficiaries, for whose benefit the trustee holds the entrusted property.

Trusts are most frequently governed by written agreements that govern the way trustees are to manage property and ultimately distribute it or utilize it for the benefit of the beneficiaries.

A frequently encountered type of trust is the Revocable Living Trust. “Revocable” because it can be revoked and amended at any point while the settlor lives and has the capacity to act; “Living” because it is created during the lifetime of the settlor and generally for the settlor’s initial benefit during his or her lifetime.

Revocable Living Trusts are frequently used to avoid the probate estate administration process. Rather than have assets pass to beneficiaries of a Last Will and Testament, a Trustee privately administers the entrusted assets and distributes the assets after the death of the settlors in accord with the instructions provided by them. As a private process, there are no public accountings required, no inventory published, and no waiting periods, all of which are associated with the typical probate estate administration process.

A trust arrangement is not the only way to avoid the probate process. For some estates, it may be simpler to avoid probate by ensuring assets have payable on death beneficiaries, which causes those assets to bypass the Will.

Furthermore, when there are no issues with leaving real estate directly to beneficiaries (rather than directing an Executor to sell it and distribute the proceeds), it may be simpler than establishing a trust to allow the real estate to pass by Will. When the personal estate (non- real estate) controlled by a Will is less than $50,000 and the only other asset passing by the Will is the real estate and there is no directed sale, it is usually possible to use a streamlined process that avoids filing an inventory or accountings using Virginia’s Small Estate Act.

Larger or more complicated estates, however, may benefit from the detail and contingency provisions that a Trust can offer. Even smaller estates that might qualify for the Small Estate process mentioned above still need to wait for 60 days after death before being able to collect monetary assets, which a trust could avoid.

Much more could be said about trusts- at the end of the day it is always beneficial to sit down with trusted counsel and discuss your particular situation to ensure your estate plan addresses your goals and priorities effectively.