What is a Trust Lawyer?
A trust lawyer is a lawyer that specializes in laws related to trusts. A trust is a tool used in estate planning. In a trust, a relationship is created at the direction of an individual called a trustor or settlor. A trust directs one or more individuals, called the trustees, to hold the trustor’s property subject to certain duties to use and protect the property for the benefit of other individuals, known as beneficiaries.
Trusts are created for many different reasons. These may include the financial benefit of the individual who created the trust, financial support for a surviving spouse or minor children, or for a charitable purpose.
Why is it Important to Have a Trust Attorney?
There are many different types of trusts. A trust attorney can help determine which may be the best fit for your needs.
The most common trusts that may be created include:
- An inter vivos or living trust. This is one of the most commonly created trusts. It is created while the settlor is still alive. It is often designed to be revocable so that the settlor can add or remove property freely during their lifetime;
- A testamentary trust is another common trust that is created through a will. It typically becomes effective upon the death of the trust creator;
- A charitable trust is created for the purpose of transferring and designating an individual’s assets or property to a charitable organization for the benefit of a particular charity or organization. The requirements for creating a charitable trust are usually more relaxed than the requirements for other trusts, since they are seen as being a benefit to the public;
- A discretionary trust is a trust that allows the trustee, or the person who manages the trust property, to decide when and how the trust assets and property should be distributed to the beneficiaries;
- A special needs trust is created to provide additional income for an individual with disabilities, but still allowing the individual to be able to receive government benefits;
- A spendthrift trust is a trust that is created to provide for the needs of another individual while also preventing the beneficiary from accessing the trust property and protecting the property from their debts or creditors; or
- A land trust allows a trustee to hold title to a certain piece of land or property, giving the trustee the power to manage the property as well as make income distributions from the property.
There are also many other types of trusts that may be created for other purposes, including:
- Asset Protection Trusts;
- Bypass (or AB) Trusts;
- Clifford (or Short-Term) Trusts;
- Crummey Trusts;
- Implied Trusts;
- Pooled Trusts;
- Secret (and Semi-Secret) Trusts; or
- Totten Trusts (Payable on Death Accounts).
A trust may contain characteristics of one or more trusts. For this reason, it is important to consider the reason for creating the trust and to consult with your attorney to discuss the best solution for your needs.
What are Some Other Issues Related to Trust Law?
There are several requirements for creating a trust that must be satisfied in order for the trust to be valid. These include:
- Intent. The trustor, or creator of the trust, must have intended to create the trust at the time of creation;
- Trustee. There must be an individual placed in charge of managing the trust for the benefit of the beneficiary as well as transferring the assets to the beneficiary. If a specific individual is not designated, the court may appoint one;
- Beneficiary. The trust must state who shall receive the assets in the trust;
- Purpose. There must be a specific purpose for the trust that does not involve illegal activity; and
- Assets. The trust must contain assets, such as money or property. A trust cannot exist without assets.
There are some items that cannot be transferred into a trust. These include:
- Life insurance policies;
- Retirement accounts;
- Pension plans, and
- Health savings accounts.
These cannot be transferred into a trust because the distribution of these items are determined by the beneficiary named in the individual policies. The named beneficiaries for the policies must be the trustee of the trust in order for these items to be placed in the trust. Your trust attorney can advise you regarding what property you can place in a trust.
Any individual can be a beneficiary of a trust, as long as they are properly named in the trust document. Many individuals list their spouses, children, and grandchildren as beneficiaries. Beneficiaries must be certain and specific. In other words, they must be ascertainable at the time the trust is created. The beneficiary’s description must be such that the court can determine who they are specifically. Your attorney can ensure your beneficiaries are properly named.
What are the Benefits of Hiring a Trust Law Attorney?
There are many benefits of hiring a trust law attorney. Whether you have a small or large estate, your trust attorney can help you determine what type of trust is best for you and what you can put in it. Your attorney can also explain any potential tax implications and legal formalities relating to the trust to ensure that your estate is protected. They can also advise you on the best avenues to take to protect your assets for the best interests of your beneficiaries and family.