Don’t Be an Impoverished Noble: Set Up a Revocable Trust
One of the concepts underlying the practice of estate planning is that people’s fortunes rise and fall. Just because you are financially secure now, this does not mean that you should assume that your wealth will stick around to sustain you in your old age and that there will be anything left for your children to inherit when you die. The only thing that is certain is death; you do not know how much money, if any, you will have left when you die, and you do not know what circumstances will prevent your heirs from accessing it. Meanwhile, you are getting older, and the financial situation of almost everyone you know, unless you are a close friend of an oligarch, is becoming increasingly precarious. Perhaps your property would be safer if it were not attached to you. It is possible to make your property legally separate from you by establishing a trust, and you do not have to be exceedingly wealthy or exceedingly dishonest to do this. Trusts have been around for centuries, although trust law has evolved with the times. To find out whether a trust would protect you and your heirs from financial risk, and if it would, which kind of trust is right for you, contact a Washington, D.C. estate planning lawyer.
The Ancient Roman Origins of Trust Law
The oldest legal concept that we might recognize as a trust was the ancient Roman fideicommissum. The owner of property had the right to transfer his property to a trustee upon the original owner’s death, at which point the trustee would distribute the property to the original owner’s heirs pursuant to the original owner’s instructions. This is similar to today’s testamentary trusts, where the trust forms only after the grantor dies, and the formation of the trust is a provision of the grantor’s will.
Revocable Trusts Are Just What You Need in Times of Uncertainty
Landowners in 12th century England ran into a problem with trust law, and the solution to it led to the creation of revocable trusts as we know them today. Knights who left England to fight in the Crusades transferred their property to trustees in accordance with the fideicommissum system, since they did not know whether they would return alive. When they returned home years later and asked for their property back, and in some cases, the trustees refused. In the ensuing litigation, the courts sided with the trustees, because the original owners had legally transferred the property to the trustees, so the original owners no longer originally owned it.
Today, if you set up a revocable trust, you still legally own the property in the trust. You can take it back whenever you decide to, but you are still responsible for paying taxes on it, like you would be if you had not placed it in a trust.
Contact Tobin O’Connor Concino P.C. About Avoiding Costly Mistakes When Establishing a Trust
A Washington, D.C. real estate attorney can help you think through the implications of your trust instrument and modify it as necessary. Contact Tobin O’Connor Concino P.C. in Washington, D.C. or call 202-362-5900.
Source:
penelope.uchicago.edu/Thayer/E/Roman/Texts/secondary/SMIGRA*/Fideicommissum.html
