Creating a Trust
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 thelegal 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 notnecessary when the trustee was also the beneficiary. In most statesnow, a trust creator may establish a revocable trust, serve as theinitial trustee, and be able to obtain immediate benefits as abeneficiary from trust property. In other states, courts find that thecreator of the trust has not relinquished enough control over the trustproperty to create a valid trust. It is what courts commonly refer toas 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 legalformalities of will and trust drafting make a lawyer's counselindispensable. A lawyer can explain all your options and help youunderstand what types of wills or trusts are right for you and yourfamily.
Consult a Lawyer - Present Your Case Now!
Last Modified: 03-14-2013 01:43 PM PDT