why does the lawyer create the terms of the living trust

One of the many benefits of a living trust is that it can help to reduce the estate taxes that must be paid by your family when they settle your estate. When creating a living trust, a living trust attorney will make sure that any potential estate taxes are addressed and ideally avoided.

Full Answer

Why hire a living trust lawyer?

Why not do it yourself? If you have a unique situation, need a special needs trust, or are overwhelmed by a complex or large estate, hiring a living trust lawyer can definitely help you sort out any questions or handle creating a complicated living trust. If any of the following circumstances apply to you, you should consider hiring an attorney:

How does a LegalZoom living trust work?

With a LegalZoom living trust, you will receive a personalized legal document specific to your needs, a pour-over will, transfer deeds, document organizer, and more. For a small additional fee, you can order an estate planning bundle which includes a living trust, power of attorney, living will (advance directive), and one year of attorney advice.

What does it mean when a trust is living?

The “living” in “living trust” means that you establish the trust while you're still alive, and the trust takes effect immediately. (Some types of trusts don't take effect until you die.) Typically, you would create a revocable living trust, which you can modify or revoke at any time until death.

Can a living trust be contested?

Living trusts can be and are contested, just like a will. The living trust salesperson who claims that a living trust can’t be contested does not know the law. Administering a living trust after your death is not cost-free.

What does the term living trust mean?

Like a will, a living trust is a legal document that lets you distribute your possessions to people and organizations after you die. A living trust “owns” the property you put into it, while still allowing you to maintain control. You can put most types of assets into a living trust, as long as they have value.

What does the legal term in trust mean?

A relationship created at the direction of an individual, in which one or more persons hold the individual's property subject to certain duties to use and protect it for the benefit of others.

What is the main purpose of a living trust?

A living trust is designed to allow for the easy transfer of the trust creator or settlor's assets while bypassing the often complex and expensive legal process of probate. Living trust agreements designate a trustee who holds legal possession of assets and property that flow into the trust.

What is the downside of living trust?

No Asset Protection – A revocable living trust does not protect assets from the reach of creditors. Administrative Work is Needed – It takes time and effort to re-title all your assets from individual ownership over to a trust. All assets that are not formally transferred to the trust will have to go through probate.

Who owns the property in a trust?

In simple trusts, the trustee is legal owner and simply holds as little more than a nominee for the beneficial owner. The beneficial owner may be in occupation of the property and has its full benefit.

Who has more right a trustee or the beneficiary?

If we think about the basics of Trust law, a proprietary right to Trust documents seems to make perfect sense. Under a Trust, a legal person holds property or assets for the benefit of another. That is, the property has vested in the Trustee, but the true owner is the Beneficiary.

What are the benefits of creating a living trust?

Top 5 Benefits of a Living TrustA Living Trust Avoids Probate. Probate is the court-supervised process of distributing a deceased person's estate. ... A Living Trust May Save Money. ... A Living Trust Protects Your Privacy. ... A Living Trust Assists in the Event of Incapacitation. ... A Living Trust Provides Certainty and Peace of Mind.

How does a beneficiary get money from a trust?

How can a beneficiary claim money from a bare/absolute trust? If a beneficiary of a bare trust is over the age of 18 years then they can simply ask the trustees to pay the money out to them that they are entitled to. As long as there is no other criteria to satisfy, the trustees should not refuse.

What assets should not be included in a living trust?

Assets that should not be used to fund your living trust include:Qualified retirement accounts – 401ks, IRAs, 403(b)s, qualified annuities.Health saving accounts (HSAs)Medical saving accounts (MSAs)Uniform Transfers to Minors (UTMAs)Uniform Gifts to Minors (UGMAs)Life insurance.Motor vehicles.

Are living trusts a good idea?

A living trust is a great way to protect and distribute your estate assets, in private and without court intervention. A living trust is an effective way to handle one's estate, especially in providing clear direction on how one's assets should be disbursed (and to whom) after death.

How much does it cost to maintain a trust?

The national average cost for a living trust for an individual is $1,100-1,500 USD. The national average cost for a living trust for a married couple is $1,700-2,500 USD.

Can I put my house in a trust to avoid creditors?

One of the reasons for setting up a trust is to set aside property as separate from one's personal assets. One of the benefits of this is that assets which are held in a trust are protected from creditors, for example should the settlor become insolvent or be declared bankrupt.

What is a living trust attorney?

A living trust attorney is an attorney who specializes in probate law and understands the legal intricacies of creating a living trust. A living trust attorney should have experience drafting living trusts and writing wills, but the best living trust attorneys have experience with trust litigation.

What happens when you hire a living trust attorney?

When you hire a living trust attorney and create a living trust for your estate, you can significantly lower the emotional stress that your family will feel after your death by doing proper estate planning in advance. 3. Protect Minor Children or Developmentally-Disabled Adults.

What happens to your estate after you die?

After your death, your living trust will advise your family how to settle your estate, including which assets are to be passed on to which individuals, and which assets should be sold.

How does a living trust work?

The way a living trust works is that during your lifetime, you transfer your assets to the trust. The trust, or the trustee, manages the trust’s assets. You can be the trustee of your own trust and you usually are at first.

How to make a living trust?

1. Create a Legally Enforceable Document. Educating yourself about the different aspects of estate planning is natural and a great first step in making decisions for your future. But it’s unlikely that you’ll be able to create a perfect, legally enforceable living trust for yourself.

Why do you need a living trust?

The reason the living trust is labeled as such is because you can create it and manage it while you’re still living. As long as you are alive and have capacity, the living trust remains revocable.

Can a fiduciary be a trustee?

If you don’t have family or friends you trust, there are private professional fiduciaries that serve as trustee for a living. If you suspect any potential litigation with respect to your trust, it is generally cheaper to may a neutral third party to serve as trustee.

Living Trusts vs. Family Trusts

Although clients sometimes refer to Living Trusts as Family Trusts, they are technically different. But the concepts are related enough that I generally know what a client is referring to when they use the Family Trust term.

Living Trusts vs. Living Wills

In estate planning, we have Living Trusts, Wills, and for bonus points, Living Wills. Confused yet? Each serves a different purpose, and I’ll save the difference between Living Trusts and Wills for a separate post. Regarding Living Wills, know that they have basically no relation to Living Trusts.

Living Trusts vs. Irrevocable Trusts

This is a better comparison: Living Trusts can be changed while Irrevocable Trusts cannot be changed. Simple right? Of course, lawyers can’t just leave it be: to add confusion, there are some practitioners who refer to certain Irrevocable Trusts as Irrevocable Living Trusts.

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How does a living trust work?

How a Living Trust Works. Your living trust holds the ownership rights or title to the assets you transfer to it. On your death, your successor trustee will distribute these assets in accordance with the terms of your living trust. Because the living trust is revocable, you, as the grantor, retain control over the assets in ...

Why do people use a living trust?

The Advantages of Using a Living Trust. There are a number of advantages to using a living trust. They include: Avoiding probate . This is often the main reason people use a living trust as part of their estate plan. The assets that are held by a living trust after your death can be distributed immediately by your successor trustee.

What is a revocable trust?

updated April 21, 2021 · 5 min read. A living trust, also known as a revocable living trust or a revocable trust, is a legal document that establishes a trust for any assets you wish to transfer into it.

What are the disadvantages of a living trust?

The Disadvantages of Using a Living Trust. There are also a number of disadvantages to using a living trust. They include: Transfer of title. While setting up the trust itself isn't particularly complex, any assets you want the trust to hold will need to be properly transferred to the trust.

Why do you keep your assets in a trust?

By keeping your assets in a living trust, you retain privacy for your family after your death. This means people can't search the public record to see what assets you owned at the time of death, and how they were distributed among your beneficiaries.

Do you have to go through probate if you die in a trust?

Because these assets are held by your trust rather than your estate, they do not have to go through the probate process.

Can you set up a trust for a minor?

For example, if one of your beneficiaries is a minor, you can set up a trust within your living trust for that beneficiary until they reach the age of majority, or an age where you feel they'll be mature enough to handle their inheritance. Keeping your affairs private.

What is a living trust?

A living trust allows the person making the trust (known as the “grantor”) and the person who receives the benefits of the trust (known as the “beneficiary”) to avoid probate. With a living trust, a person is appointed to manage the funds of the trust. This person is known as the trustee. You can sometimes be the trustee of your own living trust, ...

What is the difference between a will and a living trust?

There are differences between a will and a living trust that you should consider, such as: Drafting and maintaining a living trust can take more time than writing a will; Lawyer’s fees for living trusts may be higher than creating a will;

What is conflict in a living trust?

Disputes over the way that the property is to be distributed. Conflicts over a living trust can be complex, and may require the guidance of an estate attorney. Also, some conflicts may arise when the living trust is created. An attorney can help provide insight as to the best way to create a living trust.

How to avoid probate?

You can avoid the probate process by transferring property into the living trust before your death. When you do this, all that you transfer into the living trust will pass to the recipients outside of probate. The person you appoint to handle the trust after your death, is called the “successor trustee.”.

What are the advantages of a living trust?

The main advantages of living trusts or inter vivos trusts are: 1 Avoiding probate of certain property in the will (probate is the process of distributing the person’s estate after they become deceased); 2 Reducing estate taxes and other costs; and 3 Setting up long-term property management.

Which is better, a living trust or a will?

A will is usually more appropriate for younger people who are not at the end of their life expectancy; Wills are a fine way to distribute your property if you don’t have a large estate or many valuable assets, whereas a living trust is better to manage a larger estate with more assets;

Can you leave your house to your spouse?

If you are married, you can often leave the bulk of your estate to your spouse by owning your home in joint tenancy. Bank accounts may also be held or possessed in joint tenancy. If you live in a community property state, probate is usually faster and cheaper, and less necessary to avoid.

What is a living trust?

A living trust, on the other hand, is a private document. Protect yourself while you are alive. If you fund the trust during your lifetime and later become incapacitated, the successor trustee will be able to manage the trust assets for your benefit.

Why are trusts living?

They are “living” because they are created now, while you are alive. You sign it and it becomes an enforceable document. Your living trust can be revocable or irrevocable. A revocable trust can be revoked or amended by you. An irrevocable trust cannot be changed by you once it is signed.

What is a revocable trust?

The vast majority of people will start with a revocable trust. A typical estate plan includes a will that “pours over” your assets to a revocable trust. On your death, any assets in your name alone will become part of your estate.

What can a trust do?

A trust can address many issues, depending on the trust language. Below are nine things you can do with a living trust. Reduce estate taxes. If you are married, the trust can provide for estate tax savings.

How much can a trust save in Massachusetts?

In Massachusetts, for example, a properly drafted and administered trust can save a couple approximately $100,000 in estate taxes on the death of the second spouse. Protect minor children. A trust can hold the money for minor children until they are responsible enough to manage the money themselves.

Is a living trust a public document?

If you have a will that is probated, it will become a matter of public record along with certain other information such as the value of your assets, and often, an inventory listing your assets. A living trust, on the other hand, is a private document. Protect yourself while you are alive.

Can trusts do everything?

Clients often think trusts can do everything – as if they are magical creatures – the unicorn of estate planning. All their problems are solved because they have a trust. That may be the case, but it may not. Different trusts do different things. Living trusts are often the topic of small talk at social gatherings or on the golf course, ...

Why do people create living trusts?

By creating living trusts, they say, people can avoid probate, thereby saving their families time and money and aggravation. Living trusts also avoid conservatorships, they say, because if you become disabled, a trustee is already in place to manage your trust assets for you.

Why do you need a living trust?

The most important reasons for having a living trust include: You own property in another state. You are concerned that you might become disabled and that, as a result, you will be subject to undue influence. You want to create other trusts inside your living trust that do not require court supervision.

What happens to a trust when the trustor dies?

Consequently, when the trustor dies, this probate asset becomes subject to probate. His estate winds up in probate court anyway.

What is durable powers of attorney?

That’s what durable powers of attorney are for, which are much less expensive and easier to use. Some salespeople sell living trusts so they can learn what assets you own. These people will try to sell you an annuity or other financial products. They actually sell financial products for a living, not living trusts.

What is a trust?

A trust is a legal way of holding, managing and distributing property. Every trust must have four elements: There must be someone who creates the trust, who is often called the "trustor" or the "grantor.". There must be assets, usually called the trust "corpus.". There must be someone who holds, manages and distributes the assets, ...

Where do living trusts hold seminars?

Living trusts salespeople hold seminars at motels, public libraries, community centers, and restaurants in which they tout the benefits of living trusts. According to a study conducted by the AARP, most persons who attend these seminars are elderly or retired.

Can a successor trustee open a probate estate?

For that reason, the successor trustee will often open a probate estate anyway, to require your creditors to file claims within the time required by law or be barred from collecting their claims against your estate. Living trusts are much more expensive to set up and maintain than a will.

What is a living trust?

A living trust is a trust created during life to either save tax money or establish a long-term way to manage property. Living trusts are specifically designed to avoid probate and are also used to safeguard financial privacy and manage assets should the owner pass away or become incapacitated.

How much does it cost to create a living trust?

Many people who want to create a living trust contemplate hiring a living trust lawyer. Hiring a living trust lawyer can cost between $1,200 to $2,000, which does not itself guarantee you top-quality service. For simple situations, you can use do-it-yourself books or software and pay around $60. If you are willing to invest some time using ...

Why do people have trusts?

Typical reasons for having a trust are: 1 Avoiding the probate process and the costs and time associated with it 2 Protecting assets for children until they are mature enough to own them 3 Avoiding or reducing estate taxes 4 Having more flexibility than a will 5 Managing assets when the settlor is incapacitated 6 Preventing finances from becoming public record in probate court

What is a trust when you die?

Trusts allow people to say how their property will be distributed after they die while maintaining some control over their property while they are alive. A trust can be simple or complicated to create, depending on your assets and family situation. Trusts often are misunderstood.

Why do people choose a revocable trust?

Most people choose a revocable trust because they want to retain the power to revoke or amend it. An irrevocable trust can be beneficial for tax purposes, but it is not a good option for most people. It cannot be revoked or amended except under limited circumstances.

How to make a trust effective?

Then, to make it effective, use a deed or standard transfer document to transfer the property of the trust into the trustee's name, per the trust's terms. Your next step is to fund the trust.

Who should be your successor trustee?

Your successor trustees should be people you trust to manage your assets . Do not micromanage your trustees with an extensive list of what they can or cannot do. Choose people you believe will make good decisions and who are responsible with money. After all, it is called a trust, not a mandate.

How to create a living trust?

A living trust document must contain the following items to be valid: 1 Your name as the grantor of the trust 2 The name of the trustee who will manage the trust 3 The name of the successor trustee who will manage the trust should the trustee die 4 The names of your beneficiaries 5 How the assets are to be distributed to the beneficiaries

What are the elements of a living trust?

A living trust document must contain the following items to be valid: The name of the successor trustee who will manage the trust should the trustee die. A trust document doesn't need to be filed with the state.

What happens to a trust after death?

After your death, the trust distributes the assets to your beneficiaries. A living trust is created with a trust document or instrument. You may be able to create this yourself, but it makes sense to work with an attorney to create your trust in some situations.

What are some examples of conditions in a trust?

For example, a condition could be that your grandchildren must graduate from college to receive their inheritance or that your beneficiaries will inherit portions of the trust at specific ages.

Is a trust document a typed document?

A handwritten trust document may be valid if it's properly signed and executed, but a typed document will be clear and easy to read and is always best. Keep it simple. The more basic your trust, the better. Don't include anything beyond the basic information required by the state. Transfer ownership.

Can you transfer assets into a trust?

You need help transferring assets. If you aren't sure how to legally transfer your assets into the trust, a will and trust attorney can help you do it correctly so that your trust can go into effect. A living trust is an excellent way to manage your assets during your life and ensure they are distributed to your beneficiaries after your death ...

Do you need to file a trust with the state?

The names of your beneficiaries. How the assets are to be distributed to the beneficiaries. A trust document doesn't need to be filed with the state. As soon as it's completed and executed according to your state laws, it is valid and in effect.