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What is a trust lawyer and do you need one?
In this article, you’ll learn about:
Let’s dig in.
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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:
A trust attorney will ensure the trust is set up correctly according to:
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:
Overall, a trust lawyer plays a crucial role in managing and protecting assets within 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
Creating a trust offers a key advantage: it avoids probate.
Probate is a legal process that:
The probate process:
Probate expenses include:
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:
That’s why many people prefer trusts in their estate planning.
Read More: What Has To Go Through Probate?
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?
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.
Let’s look at the different types of trusts available.
Read More: Average Trust Fund Amount
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:
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.
An irrevocable trust is a type of trust where the terms cannot be:
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:
However, the grantor must be sure about their decision because it’s not easily reversed.
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.
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:
In many cases, Testamentary Trusts are used:
With a Testamentary Trust, the testator can ensure their assets are managed and distributed according to their wishes, even after their death.
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:
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.
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:
Often, people use both to make sure all their bases are covered.
A trust attorney guides you through the process of setting up a trust.
Our trust lawyers will help:
A trust fund attorney can:
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:
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:
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:
Next, the trust fund attorney helps identify:
The trust attorney then drafts the trust agreement, a legal document that outlines the terms of the trust.
This document includes details such as:
Accuracy in this document is paramount, as mistakes can lead to:
Trust attorneys ensure that the trust agreement is clear, legally sound, and reflective of the client’s wishes.
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:
Trust administration can present various challenges, such as:
A trust attorney can help resolve these issues, ensuring that the trust is administered:
Trust attorneys provide crucial legal advice and guidance throughout the estate planning process.
Their expertise in estate law can help clients:
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:
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 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.
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:
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.
Trust lawyers must have relevant experience and expertise in trust law.
Attorneys specializing in trusts:
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:
A trust attorney’s cost varies based on:
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 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:
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:
Trust attorneys are instrumental in trust litigation.
Both in preventing disputes and representing parties when litigation becomes necessary.
If you want help from a trust law firm, fill out the form below.
At The Hive Law, we understand the importance of:
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:
Avoid the pitfalls of inadequate estate planning strategies:
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