What is a trust agreement?

A trust agreement is a legal document that sets up a trust. In a trust, one or more people, known as a "grantor," transfers property to another person (or entity) known as the "trustee." The trustee is responsible for managing the trust, which includes the property, income, and assets that have been transferred to them. The trust agreement outlines the responsibilities of the grantor and the trustee, and it also outlines how the trust is to be handled. Trust agreements are most commonly used in estate planning, which is the process of planning for the transfer of property upon death. By setting up a trust agreement, the grantor can specify how the trustee will handle the property, income, and assets that have been transferred to them when the grantor dies. The trust agreement can also specify how the trust should be managed and who the beneficiaries (those who receive the trust assets) should be. In Virginia, trusts must be set up according to certain laws. Trust agreements must be in writing and must be approved by all parties involved. They also must be filed with the state of Virginia and registered with the local courts. Trusts can be used to protect assets from creditors, minimize estate taxes, and provide for beneficiaries upon the death of a grantor. By setting up a trust agreement, grantors can ensure that their wishes are carried out in the event of their death.

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