Trust Attorney

As we grow older, we start to think more about how to ensure our loved ones are taken care of in our absence. Building a trust is an important aspect of guaranteeing this, as well as ensuring your assets are distributed the way you intended.

When it comes to creating a trust, it is important to consider seeking the legal counsel of a qualified trust attorney. A competent trust attorney can help you draft your trust document and provide sound advice on how best to manage your assets and ensure they are distributed according to your wishes.

What Is a Trust?

A trust is a legal arrangement where one party (the grantor or settlor) transfers assets to another party (the trustee) to hold and manage those assets for the benefit of designated individuals or entities (the beneficiaries). Trusts are created based on a written agreement, known as a trust document, which outlines the terms and conditions under which the trust operates.

There are various types of trusts, including revocable living trusts, irrevocable trusts, testamentary trusts, special needs trusts, and more. The type of trust you choose depends on your goals, financial situation, and the specific needs of your beneficiaries. It's advisable to consult with an experienced trust attorney to determine the best trust strategy for your circumstances.

What Does a Trust Attorney Do?

A trust attorney specializes in providing legal expertise and guidance related to creating, managing, and administering trusts. Their role encompasses a range of tasks and responsibilities to ensure that trusts are established correctly, operated in compliance with the law, and serve the best interests of the grantor and beneficiaries. Here's what a trust attorney does:

Consultation and Assessment

Trust attorneys begin by understanding the client's financial situation, goals, and objectives. They assess whether a trust is appropriate for the client's needs.

Trust Creation and Drafting

Trust attorneys help clients create trust documents tailored to their specific goals. They draft the legal agreements that outline how the trust will operate, who the beneficiaries are, and how assets will be managed and distributed.

Type of Trust

Based on the client's goals, attorneys advise on the appropriate type of trust to create, such as revocable living trusts, irrevocable trusts, special needs trusts, charitable trusts, and more.

Asset Transfer

Trust attorneys guide clients in transferring assets into the trust, ensuring proper documentation and compliance with legal requirements.

Trustee Selection

If the client is the grantor, attorneys can advise on the selection of a trustee to manage the trust assets and carry out the trust's instructions.

Fiduciary Duties

Attorneys educate trustees about their fiduciary duties to act in the best interests of the beneficiaries and in accordance with the trust document.

Tax Planning

Trust attorneys help clients develop tax-efficient trust structures that minimize estate and gift taxes.

Beneficiary Designations

They assist clients in designating beneficiaries and outlining conditions for asset distribution.

Trust Funding

Attorneys ensure that assets are properly titled and funded into the trust, which is crucial for the trust's effectiveness.

Administration

Trust attorneys advise trustees on administrative tasks, record-keeping, accounting, and reporting requirements.

Modification or Termination

If necessary, trust attorneys can help modify trust terms or terminate trusts based on changing circumstances.

Legal Compliance

They ensure that the trust is in compliance with state and federal laws and regulations.

Dispute Resolution

If disputes arise among beneficiaries or trustees, trust attorneys can provide legal representation and guidance.

Education

Trust attorneys educate clients about the legal implications of their decisions, helping them make informed choices.

Continued Advice

Trust attorneys provide ongoing advice to ensure that the trust remains aligned with the grantor's goals and that the trust's operation remains compliant.

Estate Planning Integration

Trust attorneys often work alongside estate planning attorneys to create comprehensive estate plans that include trusts, wills, and other legal instruments.

Overall, trust attorneys play a crucial role in helping individuals and families achieve their financial and estate planning objectives through the proper establishment, management, and administration of trusts.

FAQ

Why is building a trust important?

Trusts offer various benefits, such as avoiding probate, minimizing taxes, protecting assets from creditors, providing for minor children or individuals with special needs, and ensuring controlled asset distribution.

What assets can be included in my living trust?

A variety of assets can be included in a living trust, also known as a revocable living trust. This type of trust allows you to retain control of your assets during your lifetime and provides a smooth transition of those assets to your beneficiaries after your passing. Here are some common assets that can be included in a living trust:

1. Real Estate: This includes your primary residence, vacation homes, rental properties, and undeveloped land.
2. Bank and Investment Accounts: Savings accounts, checking accounts, certificates of deposit (CDs), stocks, bonds, mutual funds, and brokerage accounts can all be placed in a living trust.
3. Business Interests: Ownership interests in partnerships, limited liability companies (LLCs), and closely held corporations can be held by the trust.
4. Intellectual Property: Copyrights, patents, trademarks, and other intellectual property assets can be part of the trust.
5. Personal Property: Tangible items like vehicles, jewelry, artwork, collectibles, furniture, and household items can be included.
6. Financial Accounts: Retirement accounts (IRAs, 401(k)s, etc.) and life insurance policies can have the trust named as the beneficiary.
7. Debt Instruments: Promissory notes, mortgages, and loans you owe or are owed can be included.
8. Digital Assets: Online accounts, domain names, social media profiles, and digital files can be managed by the trust.
9. Mineral and Royalty Interests: If you own mineral rights or royalty interests, they can be part of the trust.
10. Personal Items of Value: Items that hold sentimental or monetary value, like family heirlooms or antiques, can be included.
11. Income-Generating Assets: Assets that generate income, such as rental properties or dividend-paying stocks, can be placed in the trust to ensure a smooth transition of income to beneficiaries.
12. Household Goods: Everyday items like furniture, appliances, and electronics can be part of the trust.

Consulting with an experienced estate planning attorney can help you determine which assets are appropriate for your living trust and guide you through the process of properly funding the trust.

What is the difference between estate planning and building a trust?

Estate planning is a broader concept that encompasses various legal strategies and documents aimed at managing your assets during your lifetime and ensuring their effective distribution upon your passing. It typically includes documents such as wills, trusts, powers of attorney, healthcare directives, and beneficiary designations.

Building a trust is a specific component of estate planning. A trust is a legal entity that holds and manages assets for the benefit of designated beneficiaries. When engaging in estate planning, building a trust might be one of the strategies you and your attorney consider to achieve your goals.

How is a trust created?

A trust is created by drafting a trust document that outlines the terms, beneficiaries, assets, and conditions under which the trust operates. The grantor transfers assets into the trust, and a trustee manages them.

Can I change or revoke a trust after it's created?

Revocable living trusts can usually be modified or revoked by the grantor, while irrevocable trusts are more difficult to change. Specific terms in the trust document dictate the process for modifications.

Can I serve as the trustee of my own trust?

Yes, you can often serve as the trustee of your revocable living trust, allowing you to maintain control over the assets during your lifetime. For irrevocable trusts, the trustee is typically someone else.

What is the difference between a trust attorney and an estate planning lawyer?

While trust attorneys primarily focus on trusts and their related aspects, estate planning lawyers have a broader perspective that encompasses a range of legal instruments beyond trusts. Depending on your needs, you might choose to work with a trust attorney if your primary concern is building and managing trusts, or an estate planning lawyer if you're seeking a more comprehensive approach that includes multiple estate planning components.

How much does a trust attorney cost?

The cost of hiring a trust attorney can vary widely based on factors such as the attorney's experience, location, complexity of your situation, and the specific services you require.When consulting with an attorney, make sure to discuss fees upfront and clarify what services are included in the quoted price. Additionally, consider the potential benefits of working with an experienced attorney, as proper trust creation and management can have significant long-term financial and legal implications.

How do I know if I need to hire a trust attorney?

Deciding whether to hire a trust attorney depends on your individual circumstances and goals. While not everyone needs a trust attorney, there are certain situations where their expertise can be highly beneficial. Here are some indicators that you might need to hire a trust attorney:

1. Complex Financial Situation: If you have a significant amount of assets, diverse investments, or complex financial holdings, a trust attorney can help you structure your trust to effectively manage and distribute these assets.
2. Estate Tax Concerns: If your estate is large enough to potentially incur federal or state estate taxes, a trust attorney can assist in creating tax-efficient strategies to minimize tax liabilities.
3. Minor or Special Needs Beneficiaries: If you have minor children or beneficiaries with special needs, a trust attorney can help you establish trusts to ensure their financial security and well-being.
4. Privacy Concerns: If you want to keep your estate distribution private, a trust attorney can help you avoid the public probate process, which makes your estate plan part of the public record.
5. Avoiding Probate: If you want to spare your beneficiaries from the time-consuming and potentially costly probate process, a trust attorney can help you create a trust that allows for a smoother asset transfer.
6. Asset Protection: If you're concerned about protecting your assets from creditors, lawsuits, or divorce proceedings, a trust attorney can help you establish trusts that offer a level of asset protection.
7. Business Ownership: If you own a business or have interests in multiple business entities, a trust attorney can assist in succession planning to ensure a smooth transition of ownership.
8. Blended Families: If you have a blended family with children from different marriages, a trust attorney can help you structure your estate plan to ensure fair distribution and minimize potential conflicts.
9. Charitable Giving: If you want to incorporate charitable giving into your estate plan, a trust attorney can help you create charitable trusts or foundations.
10. Incapacity Planning: If you want to plan for the possibility of incapacity, a trust attorney can help you establish living trusts that outline instructions for managing your assets and healthcare decisions.
11. Multistate Property: If you own property in multiple states, a trust attorney can assist you in addressing the legal requirements and tax implications of each jurisdiction.
12. Legal Expertise: Even if your situation is relatively straightforward, consulting with a trust attorney can provide legal expertise, ensure that your trust is properly executed, and help you avoid potential pitfalls.

While some individuals might be able to use online templates or self-help resources for simple trusts, it's important to remember that each person's situation is unique. An experienced trust attorney can tailor your trust to your specific needs, ensure legal compliance, and provide valuable insights that generic solutions may not cover. If you're uncertain about whether you need a trust attorney, an initial consultation can help clarify your needs and options.

Common Terms Associated with Trusts

Grantor (or Settlor)

The individual who creates the trust and transfers assets into it. Also known as the trustmaker.

Trustee

The person or entity responsible for managing and administering the trust according to its terms and for the benefit of the beneficiaries.

Beneficiary

The person or entity that receives benefits from the trust, such as financial assets or property.

Revocable Living Trust

A trust that the grantor can modify or revoke during their lifetime. It allows for flexibility and can help avoid probate.

Irrevocable Trust

A trust that generally cannot be modified or revoked after it's established, except under specific circumstances.

Trust Instrument

The legal document that outlines the terms, conditions, and instructions for the trust.

Trust Agreement

The written agreement between the grantor and the trustee that outlines the trustee's responsibilities and the terms of the trust.

Principal (or Corpus)

The initial assets or property that are placed into the trust by the grantor. Also referred to as the trust's "corpus."

These are just a few of the many terms associated with trusts and estate planning. Consulting with an experienced trust attorney can help you better understand these terms in the context of your specific situation.