Trust Lawyer | What Do They Do & Do You Need One?

Trust Attorney - Trust Fund Lawyers - Family Trust Attorney Law Firm - Attorneys Who Specialize In Trusts

What is a trust lawyer and do you need one? 

In this article, you’ll learn about:

  • what a trust fund lawyer does
  • how to avoid probate, minimize taxes, and avoid creditors and lawsuits
  • the different types of trusts
  • what to look out for with a trust attorney
  • how much do trust attorneys cost
  • whether you need a trust attorney

Let’s dig in.

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What Is A Trust Lawyer?

A trust lawyer is an attorney who specializes in advising and assisting individuals in setting up trusts. 

Trusts are legal arrangements that allow a third party, called a trustee, to hold assets on behalf of beneficiaries.

The trust lawyer’s work involves:

  • understanding the client’s goals
  • explaining the benefits and drawbacks of different types of trusts
  • and drafting the trust document

A trust attorney will ensure the trust is set up correctly according to:

  • the client’s intentions 
  • legal regulations

Once a trust is established, the trust lawyer may also help in managing the trust. 

This can include tasks such as:

In cases where disputes occur over a trust, a trust lawyer may represent their client in court. 

They build a case to protect the client’s interests, be it:

  • a trustee
  • a beneficiary
  • someone contesting the trust

Overall, a trust lawyer plays a crucial role in managing and protecting assets within a trust.

What Is A Trust?

A trust is a legal arrangement where a person, called a trustee, holds and manages assets for the benefit of others, called beneficiaries

The person who creates the trust is known as the settlor, grantor, or trustor.

Here’s how a trust works. 

The settlor transfers ownership of assets to the trust. 

Then, the trustee takes over. 

The trustee’s job is to manage these assets. 

They follow the rules outlined in the trust document created by the settlor.

The beneficiaries are the ones who get to enjoy the assets. 

They might receive income from the trust during their lives or inherit the assets after the settlor’s death.

The beauty of a trust is that it can help avoid probate, the legal process of settling an estate. 

Trusts can also provide tax benefits and protect assets from creditors.

Read More: The Biggest Mistake Parents Make When Setting Up A Trust Fund

Avoiding Probate With A Trust

Creating a trust offers a key advantage: it avoids probate. 

Probate is a legal process that:

  • distributes a deceased person’s estate to heirs and beneficiaries
  • pays off any debts to creditors

The probate process: 

  • takes a long time (months or even years)
  • is a public process
  • that can be costly

Probate expenses include:

  • court fees,
  • appraisal costs
  • executor’s fees
  • other miscellaneous fees

These costs can significantly reduce the estate’s value.

But when you place assets in a trust, they don’t go through probate. 

After the person who created the trust (the trustor) passes away, the trustee takes over. 

The trustee is the person or entity managing the trust. 

The trustee distributes the assets to the beneficiaries. 

The terms of the trust agreement guide this distribution.

This transfer of assets through a trust is typically faster, cheaper, and private. 

This contrasts with how probate is public (everyone can see the assets your family gets). 

As a result, using a trust to distribute assets:

  • saves time and money
  • protects your privacy 

That’s why many people prefer trusts in their estate planning.

Read More: What Has To Go Through Probate?

Tax Benefits Of A Trust

Irrevocable trusts, a specific type of trust, can reduce estate tax

When you place assets into an irrevocable trust, these assets typically aren’t part of your taxable estate anymore. 

So, the assets in the trust are not taxed when you die. 

Read More: How Much Money Can You Inherit Without Paying Taxes On It?

Creditor Asset Protection Trust

Trusts can also provide a level of protection against creditors. 

Assets held in certain types of trusts are generally not accessible to the trustor’s creditors. 

This is because once assets are placed in an irrevocable trust, they are technically owned by the trust and not the trustor.

This makes them out of reach for most creditors. 

However, it’s important to note that this is a complex area of law with many nuances.

So the exact level of protection may vary depending on the specifics of the trust and local laws.

Types of Trusts

Let’s look at the different types of trusts available. 

Read More: Average Trust Fund Amount

Revocable Trusts

A revocable trust, often called a “living trust,” is a type of trust that you can change or cancel during your lifetime. 

You create this trust by transferring ownership of your assets to the trust. 

You can serve as the trustee, which means you maintain control over the assets.

The trust document outlines how:

  • your assets should be managed during your life 
  • how they should be distributed after your death

Because it’s revocable, you can modify these terms at any time while you’re alive and mentally capable.

One key benefit of a revocable trust is that it can help your estate avoid probate. 

However, unlike an irrevocable trust, a revocable trust doesn’t provide protection against creditors.

This is because the assets within it are considered part of your taxable estate. 

So, it may not be the best option for everyone.

In short, a revocable trust is a flexible tool for estate planning.

It allows you to maintain control over your assets and make changes as needed. 

It’s a way to ensure a smoother transition of assets after death.

But it does not offer all the protections of other types of trusts.

Irrevocable Trusts

An irrevocable trust is a type of trust where the terms cannot be:

  • modified
  • amended
  • terminated 

To make changes, you have to get permission from the named beneficiaries. 

The grantor, having transferred assets into the trust, effectively removes all of his or her rights of ownership to the assets and the trust.

This is in contrast to a revocable trust, which allows the grantor to alter the trust terms during their lifetime. 

With an irrevocable trust, the assets held in it aren’t considered part of the grantor’s taxable estate, so it has tax benefits. 

Also, because the assets are no longer the property of the grantor, they’re shielded from creditors and legal judgments.

This kind of trust is often used for:

  • estate and tax planning
  • asset protection
  • charitable estate planning

However, the grantor must be sure about their decision because it’s not easily reversed.

Read More: Who Owns The Property In An Irrevocable Trust

Irrevocable vs Revocable Trusts

Revocable trusts and irrevocable trusts are two types of trusts used in estate planning. 

They serve different purposes and have different benefits and drawbacks.

A revocable trust, also known as a living trust, is flexible. 

You, as the grantor, can change it at any time while you’re alive. 

You can add or remove assets, change beneficiaries, or even dissolve the trust entirely. 

This control extends to the assets within the trust. 

They remain part of your taxable estate. 

Upon your death, the assets in the trust bypass probate and go directly to your named beneficiaries.

An irrevocable trust, on the other hand, is rigid. 

Once you establish it and transfer your assets into it, you can’t change or dissolve it without the consent of the beneficiaries. 

You give up control over the assets in the trust. 

They’re no longer part of your taxable estate. 

This can reduce estate taxes and protect the assets from creditors. 

However, you lose the flexibility to manage and control these assets.

In short, a revocable trust offers flexibility and control.

But it lacks the tax and creditor protection benefits of an irrevocable trust. 

Conversely, an irrevocable trust provides significant tax advantages and asset protection.

But at the cost of relinquishing control over the trust assets.

Testamentary Trusts

A Testamentary Trust is a type of legal arrangement created by a will

It comes into effect only after the person who made the will, known as the testator, passes away. 

The trust outlines how the testator’s assets will be distributed and managed.

The will names a trustee. 

The trustee is responsible for managing the trust according to the terms set out in the will. 

This can include:

  • distributing assets to beneficiaries
  • managing investments
  • taking care of property until a beneficiary reaches a certain age

In many cases, Testamentary Trusts are used:

  • when beneficiaries are minors
  • when beneficiaries have special needs
  • if the testator wants to control how and when the beneficiaries receive their inheritance

With a Testamentary Trust, the testator can ensure their assets are managed and distributed according to their wishes, even after their death.

Living Trusts

A living trust is a legal document created during a person’s lifetime. 

It allows you to control and manage your assets while you’re still alive and capable. 

You, as the trust maker, appoint a trustee, often yourself, to manage the trust. 

This includes your property, money, and other assets.

Upon your death or if you become incapacitated, a successor trustee that you’ve named steps in. 

They distribute the trust’s assets to the beneficiaries you’ve chosen. 

This happens without going through probate, a legal process that verifies a will. 

This makes asset distribution quicker, more private, and often less expensive.

A Living Trust can be “revocable,” meaning you can change or cancel it at any time. 

Or it can be “irrevocable,” which can’t be changed without the consent of the beneficiary.

In short, a Living Trust offers:

  • control over your assets during your lifetime
  • smooth, private transfer of those assets after your death or incapacity

Special Needs Trusts

A Special Needs Trust is a legal tool designed to benefit individuals who have physical or mental disabilities. 

It holds and manages assets for these individuals. 

It’s created to ensure that the beneficiaries still qualify for government benefits like Medicaid and Supplemental Security Income (SSI).

Typically, a trustee, who is not the beneficiary, manages the trust. 

They make decisions about how the trust’s assets are used. 

This could be for anything from medical expenses to education costs.

(As long as it benefits the person with special needs.)

The beneficiary cannot directly control the trust’s assets.

But the Special Needs Trust provides a source of funds that can enhance their quality of life. 

It’s a strategic way to provide for their long-term needs without jeopardizing their eligibility for public assistance.

Will vs Trust

A will and a trust are both legal tools for managing your assets, but they work in different ways.

A will outlines your wishes after you die. 

It states who should get your assets and who should take care of any minor children. 

However, a will has to go through a legal process called probate, which can be time-consuming and costly.

On the other hand, a trust can skip the probate process

You place assets in a trust and name a trustee to manage them. 

The trustee distributes these assets to your beneficiaries according to your instructions.

(Either while you’re alive or after your death.)

A trust offers more privacy than a will because it doesn’t become part of the public record. 

However, a trust can be more complex and expensive to set up compared to a will.

Choosing between a will and a trust depends on your personal circumstances, like:

  • the size of your estate 
  • your privacy preferences

Often, people use both to make sure all their bases are covered.

What Does A Trust Attorney Do?

A trust attorney guides you through the process of setting up a trust. 

Our trust lawyers will help:

  • draft the necessary legal documents 
  • make sure they comply with all state and federal laws

A trust fund attorney can:

  • explain the different types of trusts 
  • recommend the one that suits your situation best

They’ll consider your financial status, family dynamics, and personal goals.

If you’ve already established a trust, a trust attorney manages the trust’s assets. 

They ensure everything runs smoothly and according to the trust’s terms.

A trust attorney also provides legal advice. 

They can help navigate complex issues like:

  • tax implications
  • asset protection
  • wealth transfer strategies

In case of disputes, a trust attorney defends the trust

They develop strategies and represent the trust in court.

Lastly, a trust attorney can assist in updating a trust. 

If your circumstances change, they ensure your trust reflects these changes.

In short, a trust attorney’s job is to:

  • protect your interests
  • manage your trust
  • ensure a smooth transition of assets when the time comes

Establishing Trusts

Establishing a trust is a multi-step process, and a trust attorney’s role is to ensure that each step is done correctly. 

The trust fund lawyer starts by advising the client on the best type of trust for their specific needs.

They consider factors like the client’s:

  • financial situation
  • family dynamics
  • long-term goals

Next, the trust fund attorney helps identify:

  • the assets to be placed in the trust
  • the trustee who will manage the trust
  • the beneficiaries who will receive the benefits of the trust

The trust attorney then drafts the trust agreement, a legal document that outlines the terms of the trust. 

This document includes details such as:

  • the powers of the trustee
  • the rights of the beneficiaries
  • instructions for asset management and distribution

Accuracy in this document is paramount, as mistakes can lead to:

  • legal disputes
  • unintended tax consequences
  • other issues

Trust attorneys ensure that the trust agreement is clear, legally sound, and reflective of the client’s wishes.

Trust Administration

A trust fund attorney also has a significant role in trust administration. 

The trustee is typically responsible for the day-to-day management of the trust.

And a trust attorney can provide valuable oversight and support.

The attorneys specializing in trusts can advise the trustee on their responsibilities and duties.

This may include:

  • managing and investing assets
  • making distributions to beneficiaries
  • maintaining records, and filing taxes

Trust administration can present various challenges, such as:

  • dealing with uncooperative beneficiaries
  • managing complex assets
  • navigating tax laws

A trust attorney can help resolve these issues, ensuring that the trust is administered:

  • according to the terms of the trust agreement 
  • in the best interests of the beneficiaries

Legal Advice and Guidance

Trust attorneys provide crucial legal advice and guidance throughout the estate planning process. 

Their expertise in estate law can help clients:

  • avoid potential pitfalls
  • resolve disputes
  • make informed decisions

Let’s say a dispute arises between beneficiaries.

The estate trust attorney can provide legal advice on how to resolve the issue in a way that aligns with the terms of the trust agreement.

Attorneys who specialize in trusts also help clients:

  • navigate complex tax issues
  • understand their legal rights and obligations
  • ensure that their estate plan aligns with their overall financial plan

Overall, the role of a trust attorney in estate planning is multifaceted and essential. 

They do anything from establishing trusts to administering them and providing legal advice.

Trust attorneys help ensure that the client’s estate plan is executed smoothly and effectively.

Choosing the Right Trust Attorney

Choosing the right family trust attorney is a crucial decision that can significantly impact your estate planning process. 

This choice will influence the setup, administration, and potential litigation of your trust. 

The following sections detail factors to consider when selecting your trust attorney.

Do I Need A Trust Attorney?

A trust fund attorney can be very beneficial if you’re setting up a trust. 

They understand the complex legalities and can help you navigate them. 

Trusts can be complicated, with different types offering various benefits and drawbacks. 

Attorneys who specialize in trusts can advise you on the best type for your situation.

A trust attorney becomes even more critical when you have:

  • substantial assets 
  • a complex family situation

They can help ensure your assets are distributed according to your wishes while minimizing potential disputes and tax implications.

Trust attorneys are also important in trust administration. They guide trustees in their duties, helping to manage the trust properly and avoid legal issues.

In the case of disputes or litigation involving the trust, a family trust lawyer is invaluable. 

They can represent your interests, protect your rights, and work towards a resolution.

So, do you need a trust attorney

If you want peace of mind, expert advice, and professional handling of your trust matters, the answer is yes.

Relevant Experience and Expertise

Trust lawyers must have relevant experience and expertise in trust law. 

Attorneys specializing in trusts:

  • will be up-to-date with the latest legal changes 
  • can offer insightful advice based on their extensive knowledge

Trust law is a complex field with unique rules and regulations. 

It’s not enough for an attorney to be familiar with general law. 

An attorney specializing in trust law will be knowledgeable about:

  • the intricacies of setting up various types of trusts 
  • navigating potential legal hurdles

How Much Does A Trust Attorney Cost?

A trust attorney’s cost varies based on:

  • the complexity of your estate 
  • the services you need 

For a typical trust, the cost is around $2,000. 

For more complex estates requiring specialized planning, the fee starts at $5,000.

And they can increase depending on the intricacy of the work. 

Additionally, for work charged by the hour, the rate is $400. 

This may apply to tasks like trust administration, litigation, or consultation. 

It’s always crucial to discuss fees upfront and understand what services are included in these costs.

Trust Litigation

Trust litigation can be a complex and emotionally charged process.

Litigation often arises from disagreements among trustees, beneficiaries, or others with an interest in a trust. 

This section delves into common causes for such litigation, illustrated with real-world case studies. 

It also outlines the critical role that trust attorneys play in these disputes, from:

  • their responsibilities and duties 
  • strategy development and execution

Causes for Trust Litigation

The complexity of trust laws combined with emotional family dynamics can be a potent mix, leading to conflicts. 

Here are some common causes of trust litigation:

  • Breach of Fiduciary Duty: This happens when a trustee fails to act in the best interest of the beneficiaries, violating their legal obligations. Examples may include mismanagement of trust assets or self-dealing.
  • Disputes Over Trust Interpretation: Parties may disagree about the terms of the trust, leading to disputes about asset distribution or management.
  • Lack of Capacity: If the trustor (the person who created the trust) was not mentally competent at the time the trust was created, it might be contested.
  • Undue Influence: If it’s believed that the trustor was coerced or manipulated into creating the trust or its terms, litigation may ensue.

Role of a Trust Attorney in Litigation

Trust attorneys are instrumental in trust litigation.

Both in preventing disputes and representing parties when litigation becomes necessary.

  • Duties and Responsibilities: A trust attorney’s primary responsibility is to represent their client’s interests effectively. They gather and present evidence, file necessary court documents, communicate with the other party’s legal team, and provide advice and guidance to their client.
  • Strategy Development and Execution: Trust attorneys develop a strategy based on the details of the case and the client’s goals. This might involve negotiating with the other party, preparing for trial, or working to validate or invalidate the trust.

Hiring A Trust Attorney

If you want help from a trust law firm, fill out the form below. 

At The Hive Law, we understand the importance of:

  • protecting your hard-earned assets 
  • ensuring your family’s future
  • not losing everything to creditors and lawsuits
  • properly (and legally) distributing assets 

We only accommodate a limited number of clients each month.

So don’t miss your opportunity to work with our trust fund lawyers.

Benefits of our trust services:

  • Tailored solutions to fit your unique needs and goals
  • Expert guidance in navigating complex tax and legal matters
  • Preservation of your wealth for future generations
  • Streamlined asset distribution according to your wishes

Avoid the pitfalls of inadequate estate planning strategies:

  • Creditors seizing your assets
  • Lawsuits jeopardizing your family’s financial security
  • Family disputes over inheritance
  • Costly and time-consuming probate processes

Talk soon.

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