When Can I Create a Trust?
You must be alive and have the mental capacity to enter into a contract. Unless you meet these two criteria, your trust may be successfully disputed by those who claim that you lacked capacity to create the trust. Who Should I Designate as Parties to my Trust?
There are typically three main parties to a Trust: - The Trust Creator – the original owner of the property to be transferred to and held by the trust
- The Trustee – the entity (such as a person or financial institution) that holds the legal title to the trust estate – there may be more than one
- The Beneficiaries – the intended beneficiaries from the trust estate
Should I Set Up a Trust?
You should discuss the advantages of a trust with an attorney if: - You are the parent of minor children;
- Privacy is important to you;
- You own real property;
- Your estate has a gross value in excess of $1,000,000; or
- You wish to avoid conservatorship or probate.
Can I Create a Trust, Serve as the Trustee and be the Trust Beneficiary?
The answer: it depends. Historically courts concluded that a trust was not necessary when the trustee was also the beneficiary. In most states now, a trust creator may establish a revocable trust, serve as the initial trustee, and be able to obtain immediate benefits as a beneficiary from trust property. In other states, courts find that the creator of the trust has not relinquished enough control over the trust property to create a valid trust. It is what courts commonly refer to as an “illusory” trust. Do I Need a Lawyer to Draft a Will or Trust?
If you choose to create a will or trust, consulting with an attorney experienced in estate planning is always a wise thing to do. The potential tax implications and legal formalities of will and trust drafting make a lawyer's counsel indispensable. A lawyer can explain all your options and help you understand what types of wills or trusts are right for you and your family. |
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