A trust is a contractual arrangement between the party who enters property or assets into it for the benefit of others, called the settler, and the person entrusted to manage those properties and assets, called the trustee. The purpose of a trust is to execute the distributive intent of the settler with regard to all property and assets placed into the trust and each of the intended beneficiaries. A living trust can remain in effect for many years after the settler’s death, or terminate many years prior.
Trusts coordinate the distributive intent of the settler with the consummation of time and circumstances required for a beneficiary to legally take possession of a parcel of property. For example, a father might wish to pass down to his teenage son a collection of rare hunting rifles, but the son cannot legally take possession of the collection until age 21. Under these circumstances, the trustee would be charged with possessing and properly preserving the collection until the intended beneficiary becomes 21 years of age or whatever age the settler deems appropriate and specifies in the terms. Also, the settler may establish conditions necessary for the receipt of property, such as, for example, specifying that the son must have graduated college in order to inherit the prized firearms.
Trusts provide professional preservation of items requiring special care, such as wine collections, and ensure that complex financial holdings appreciate at acceptable rates.
What do “Revocable” and “Living” Mean?
A revocable living trust can be changed or repealed by the settler at any time so long as the settler is capable of making legal decisions, whereas an irrevocable living trust cannot amended once it is executed. A living trust is one creative and effective during the life of the settler, while a testamentary trust is one written into a will and which becomes effective upon the death of the settler.
How Does a Trust Serve Me Better Than a will?
Each parcel of property specified in a trust circumvents probate court and will be managed and distributed exactly according to the language of the trust. This provides the settler with the advantage of certainty regarding the distribution of assets because probate courts can sometimes produce unpredictable and unintended results. Also, the fees necessary to execute a trust are clearly recognizable and eliminate the uncertainty of costs associated with probate court.
A living trust also allows flexibility while the settler suffers periods of incapacity. Using durable power of attorney, the trustee or other designee of the settler can amend the trust during such periods while a will cannot be altered while the testator is incapacitated.
Does a Trust Eliminate the Need for a Will?
Depending on the nature of the estate assets and the characteristics of the beneficiaries, a trust might not be the best choice for passing down one’s estate. A trust does have the ability to replace a will entirely, however, it is beneficial for a settler also to create a will also because assets that are acquired after executing a trust, and therefore not expressly identified in the trust, will be pass through the probate process, and a will can act as a catch all such items.
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If your estate contains complicated assets that require professional management or intended distribution to parties who are currently ineligible for receipt, a trust might provide solutions. An experienced lawyer can provide sound advice when considering the preparation of trusts and wills. Contact the attorneys at The Kamerow Law Firm, PLLC for a free and confidential consultation by calling 703-370-8088.
High school sweethearts might break romantic promises to one another with no legal ramifications, but when people or business entities enter into contractual agreements, the law enforces performance of those promises. Business contract laws have been crafted to prevent the harm created by broken promises. Modern businesses would be unable to conduct everyday affairs without the binding force of contracts through which they can count on performance by those who promise it.
Consider a construction firm that builds a house for a customer. Pursuant to good planning, the firm contracts with a supplier of lumber to take delivery of a predetermined amount of lumber and on a predetermined date and time, necessary for the construction of the house. If the supplier fails to deliver the wood, the construction company cannot profit by building the house, and the customer in turn, will not have a house in which to live.
When is a contract formed?
A contract is formed at the intersection between offer and acceptance, or in other words, upon the agreement of offeree and offeror. There are four elements to a legally binding offer.
- Commitment – Must involve language that reasonably induces the offeree to believe that the offeror will uphold the terms in the offer.
- Definite Terms – The offer must contain definite terms regarding the money, property, or services involved.
- Communication – Although it may seem repetitive, a basic element of a contractual offer is communication of that offer to any party accepting the offer. If one who returns a lost dog is not aware of the offer of a reward for the return of the dog because he did not see the offer in a sign or newspaper, the contract does not exist at the time of performance and the one who returned the dog would not be entitled to a reward.
- An identified offeree – The contract must specify a party or parties to whom the offer is being made. In the case of the offer for the lost dog, which is a unilateral offer, no contract exists until the finder of the lost dog communicates with the reward-offering owner, and then the finder, himself, becomes the offeree of the contract.
For a promise to be legally binding, even under the satisfaction of the above, it must involve some form of consideration in return. This means that the promise must involve a tradeoff between offeree and offeror so that the promisor incurs some form of detriment and at the same time, receives something beneficial in exchange. In the case of the lumber company promising to deliver the building materials, the payment for the wood constitutes consideration while the relinquishing of the materials constitutes detriment.
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People can be unreliable, but contract laws are put in place so that the promises they make do not have to be so. If you or a loved one is involved in a dispute centering on a contract, whether written or oral, protect your rights. If a promising party fails to perform, you might be entitled to compensation for damages arising out of the defaulted promise. Contact the attorneys at The Kamerow Law Firm, PLLC for a free and confidential consultation by calling 703-370-8088.
Despite the conception that real property is a solid asset, it is not static. Land, itself, can be transformed by natural causes, and rights of access or ownership can change over time and circumstances.
When a parcel of land is neglected by the owner, another party may permanently gain ownership rights to that land in fee simple absolute (a type of ownership involving absolute, sole ownership with no encumbrances) and forever extinguish the previous owner’s rights to the land.
This is accomplished by adverse possession, the elements of which vary by state, but which share commonalities. Three basic elements are necessary for AP, consisting of a physical, mental, and timely nature.
One who takes ownership of land through AP must take actual physical possession of the land and use the land for its intended purpose. For example, a piece of farm land must be used for farming. Making improvements on the land in the form of a house or other buildings can establish the element of possession. This use and possession puts the current owner on notice that the land is being taken over by another. The owner need not have actual knowledge of the occupancy, but the trespasser must openly and notoriously possess the land so that a diligent owner should know.
The mental element to AP requires the one who takes over property to do so in hostile fashion. In other words, the party who enters the land and puts it to use must do so knowing that the land does not belong to him, but he occupies and uses it regardless. This type of entry is known as claim of right. The mental element can also be satisfied by color of title, in which the adverse possessor enters the land under the belief that he holds title to the land, but the belief is unfounded since the title is not valid.
Lastly, the possessor must satisfy the time element by continuously possessing and using the land for a period of time. In Virginia, the time element is satisfied in 15 years, after which the previous owner will have missed the statute of limitations in evicting the trespasser and the trespasser becomes the true owner.
An easement is the right of one party to use property owned by another, and at times, without the permission of the rightful owner. Usually, the use in question involves walking or driving over a path on the land. The term also refers to the path or the portion of land, itself, that is used by the non-owning parties. This path can become paved for use by vehicles.
Though several types of easements exist, and each can arise out of different circumstances, one type can stem from years of neglect in preventing trespassers, in a fashion similar to AP. An easement can be established by users of nearby land crossing over the property in question from a parcel of land that is accessible only by crossing over the easement, (a situation created by the severing of adjacent property that leave a divided portion without access to public roadways.) It can also be created by pedestrian trespassers, such as beach goers who walk a path over the property of a seaside house in order to get to the public beach. If the pedestrians are not prevented from walking the path for a sufficient number of years, the path can become a public easement on which the property owner has no right to evict.
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If you or a loved one inherited a parcel of land that is either being trespassed upon or does not fit the description of the land in the deed willed, you need an experienced lawyer to determine if your rights to the land are being usurped. Contact the attorneys at The Kamerow Law Firm, PLLC for a free and confidential consultation by calling 703-370-8088.