questions to ask an attorney when setting up a trust

Title: 6 Questions To Ask a Trust Attorney

Full Answer

What are the duties of a trust attorney?

• Inform the family of your position and offer to assist with the funeral. ...
• Collect all death benefits (social security, life insurance, retirement plans, associations) and put them in an interest-bearing account until assets are distributed. ...
• Notify the bank, brokerage firm, and others of the grantor’s death and that you are now the trustee. ...

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How to find an estate or trust attorney?

• Look at biographical information, including the lawyers’ own websites. ...
• Search the internet to learn more about prospective attorneys. ...
• Ask other people if they have heard of the attorneys and what they think about them.
• Contact your state bar association or visit the bar association's Web site to find out if the lawyer is in good standing.

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What does a trust lawyer do?

• Notifying all beneficiaries as well as government entities and other organizations of the person’s death. ...
• Management of the entire trust estate including assessments of property values, reconciling all outstanding debts/bills, reporting gains and losses, filing taxes, etc.
• Distribution of all assets to the beneficiaries

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Do I need an attorney to settle an irrevocable trust?

You will need an irrevocable trust that contains the necessary terms to avoid or reduce your estate tax liability. If you feel that your net worth is close to the estate tax exemption, you should consult with an estate planning attorney.

What questions to ask when setting up a trust?

Questions to ask your parentsWhat were your intentions in creating this trust? Ask why this trust was set up. ... How do you think this trust will impact me? ... Who else has access to the trust? ... What is your relationship with the trustee and/or trust administrator? ... How will I work with the trustee and/or trust administrator?

What are the disadvantages of a trust?

One of the disadvantages of a Trust are that Trusts are very difficult to understand. Historically, trusts used language that was specific to the legal field. For those that were not trust and estate lawyers, it was almost impossible to understand.

What assets should not be in a trust?

Assets That Can And Cannot Go Into Revocable TrustsReal estate. ... Financial accounts. ... Retirement accounts. ... Medical savings accounts. ... Life insurance. ... Questionable assets.

What items should I put in my trust?

What Type of Assets Go into a Trust?Bonds and stock certificates.Shareholders stock from closely held corporations.Non-retirement brokerage and mutual fund accounts.Money market accounts, cash, checking and savings accounts.Annuities.Certificates of deposit (CD)Safe deposit boxes.

What are the 3 types of trust?

With that said, revocable trusts, irrevocable trusts, and asset protection trusts are among some of the most common types to consider. Not only that, but these trusts offer long-term benefits that can strengthen your estate plan and successfully protect your assets.

Do trusts pay taxes?

Does a trust file its own income tax return? Yes, if the trust is a simple trust or complex trust, the trustee must file a tax return for the trust (IRS Form 1041) if the trust has any taxable income (gross income less deductions is greater than $0), or gross income of $600 or more.

Should I put my bank accounts in a trust?

Recommended for you To make sure your Beneficiaries can easily access your accounts and receive their inheritance, protect your assets by putting them in a Trust. A Trust-Based Estate Plan is the most secure way to make your last wishes known while protecting your assets and loved ones.

What is better a Will or a trust?

MUMBAI : A will makes sense for families with limited assets. But for the wealthy, forming a trust to distribute assets is a better option than relying on a will. A trust is a legal structure. The trust owner (the settlor) appoints trustees to take care of his wealth for himself and his beneficiaries.

What are the disadvantages of putting your house in trust?

The Cons. While there are many benefits to putting your home in a trust, there are also a few disadvantages. For one, establishing a trust is time-consuming and can be expensive. The person establishing the trust must file additional legal paperwork and pay corresponding legal fees.

Should you put your IRA in a trust?

A trust as IRA beneficiary can bring you a step closer to achieving estate planning goals. It can ensure that most of your IRA wealth is preserved until your heirs are older, perhaps until their retirement. But it does cost more to set up and have other pitfalls.

What is the average trust fund amount?

Less than 2 percent of the U.S. population receives a trust fund, usually as a means of inheriting large sums of money from wealthy parents, according to the Survey of Consumer Finances. The median amount is about $285,000 (the average was $4,062,918) — enough to make a major, lasting impact.

Can I put my 401K in a trust?

Retirement plans themselves cannot be transferred into a trust; those assets must be distributed from the plan first, which triggers income tax on the distribution. If you are older than 72 when you die, money generally must come out of your retirement plan according to the schedule that was required before your death.

What are the disadvantages of putting your house in trust?

The Cons. While there are many benefits to putting your home in a trust, there are also a few disadvantages. For one, establishing a trust is time-consuming and can be expensive. The person establishing the trust must file additional legal paperwork and pay corresponding legal fees.

Who owns the property in a trust?

TrusteesTrustees. The trustees are the legal owners of the assets held in a trust.

What happens when you inherit money from a trust?

The trust itself must report income to the IRS and pay capital gains taxes on earnings. It must distribute income earned on trust assets to beneficiaries annually. If you receive assets from a simple trust, it is considered taxable income and you must report it as such and pay the appropriate taxes.

How do trusts avoid taxes?

For all practical purposes, the trust is invisible to the Internal Revenue Service (IRS). As long as the assets are sold at fair market value, there will be no reportable gain, loss or gift tax assessed on the sale. There will also be no income tax on any payments paid to the grantor from a sale.

What are the benefits of a will versus a trust?

1) What are the benefits of wills versus trusts? While most estate planning activity includes a discussion of a will, you may actually be better off establishing a trust. A trust allows you to shield your estate from the probate court, and also preserve some confidentiality.

What to discuss with an estate planning attorney?

In meeting with an estate planning attorney, it’s recommended that you discuss your options for ensuring end-of-life medical wishes are upheld. For example, if you fall into a coma, do you want life support systems to be used? At what point do you wish for breathing machines and feeding tubes to be removed? You can outline your preferences with an advanced health directive and/or a power of attorney. Ask your estate planning attorney for further information.

What is Singh Law Firm?

At Singh Law Firm, we boast ample expertise in will contract law. But more than that, we’re known for our friendly, relational, and client-oriented approach. We’d love to answer any questions you have about wills, trusts and estate attorney, and whatever else.

What is the most important thing to do when planning an estate?

One of the most important aspects of estate planning is preserving the value of your assets. In doing so, you can ensure the most generous possible legacy for the people you love. There are a number of tax strategies that can be useful, including the selection of the right kind of trust. Ask your lawyer for guidance.

Can you put your life insurance in a trust?

Most of your assets can be put into a living trust, though there may be some exceptions, including life insurance and certain types of retirement accounts. Generally, you’ll want to place as many assets as you can into the trust. Again, ask your attorney for further insight.

What is a revocable living trust?

A revocable living trust allows you to manage your property and change or dissolve the trust at any time for any reason at your full discretion. As the trustee, you have total control over your assets which means you can exchange, sell or invest them at any time.

What happens when you send your estate to probate?

It’s also important to keep in mind that when you send your estate to probate, your privacy will be violated. Probate means a list of your assets will be easily accessed by the general public. If you want to keep the contents of your estate between you and your beneficiaries, a living trust is right for you.

What happens when an estate goes into conservatorship?

Many people are concerned about their estate going to conservatorship in the event they become incapable of managing their own affairs. With a living trust, assets are managed by a co-trustee or successor trustee named in the trust agreement if the creator becomes incapacitated.

What is a living trust?

A living trust— also called a revocable living trust— is an invaluable tool for estate planning, not least because it offers a private, efficient, no-headache way to transfer property after your pass on without the involvement of a probate court.

What happens if you become incapacitated?

If you become incapacitated, and cannot manage your property yourself, your co-trustee or a successor trustee will step in for you. Many people name their children as successor trustees.

Why do people name themselves as trustees?

People name themselves and a spouse as initial trustees. This allows them to maintain autonomy over property placed within the trust during their lifetime (providing they are mentally competent to manage their own affairs).

What assets should be transferred to a living trust?

These should include any real estate, family heirlooms, and any savings or retirement plans. Be sure you know where the paperwork is for each asset so you can prove ownership. All of these assets may be transferred to your living trust.

How is capital distributed in a trust?

The distribution of capital and income to beneficiaries of a trust is set out in the relevant trust deed for the structure. For discretionary trusts, the trust deed generally provides that the trustee has the power at its absolute discretion to distribute capital and income to beneficiaries (thus allowing you to structure tax efficiently). However, if the trust involves (or may in the future involve) non-family members, such as business partners or external investors, a unit trust should be used, where terms of the trust deed fixes the distribution of capital and income.

What is a family trust?

The most common form of trust is a discretionary trust, also known as a family trust. Here, the trustee is given the power/discretion to decide which of the beneficiaries are to benefit from the operation of the trust. Other types of trust structures include a unit trust and a hybrid trust. For a unit trust, the property held in trust is divided ...

What is a hybrid trust?

Beneficiaries subscribe to these units similar to shareholders subscribing to shares in a company. A hybrid trust is a mix between a discretionary trust and a unit trust. ...

What is the purpose of a trust deed?

The trust deed will govern the distribution of the trust funds. This is usually at the absolute discretion of the trustee, in the case of a discretionary trust, or a fixed distribution, in the case of a unit trust. The company’s constitution and/or shareholders agreement will govern the distribution of the company dividends.

When is a trust deed vesting?

The vesting date of the trust is generally on the 79th anniversary of the date of the trust deed . If the trust is required to be wound up before the vesting date, the trust deed will generally provide that subject to any provision that limits or restricts distributions of income or capital, the trustee must pay or otherwise discharge all liabilities of the trust and distribute the trust fund before the new vesting date.

What is a trust?

A trust is a legal relationship whereby one party, known as the trustee, holds assets for the benefit of one or more other parties, known as the beneficiaries. The most common form of trust is a discretionary trust, also known as a family trust. Here, the trustee is given ...

What are the advantages and disadvantages of having a corporate trustee?

The main advantages of having a corporate trustee are: Limited liability; Separation of personal assets from trust assets; and. Ease of succession. The main disadvantage is cost and complexity as you would need to set up another company and have another set of records for that company. 4.

What is an AB trust?

There are different types of trusts including an AB trust, revocable, and irrevocable trust. An AB trust is created by a married couple with the objective of minimizing estate taxes due to double-taxation.

Can a trust be contested?

Yes, a trust can be challenged just like a will. If for any reason the trust maker was mentally incompetent, forced, unduly influenced, or deceived when setting up the trust, then the contest can be successful.

Who should be my trustee?

The trustee is who manages and protects any assets, and it can be anyone you choose. While you can name yourself as a trustee, it’s also important to name a secondary trustee to handle affairs once you pass. You can even choose a corporation as your trustee if you prefer.

Do I need a power of attorney?

Living trusts control all of your assets if you become incapacitated, but many attorneys still suggest that you draw up a power of attorney to make financial and medical decisions on your behalf. The power of attorney protects you as an individual whereas a living trust controls where your assets go when you pass.

How do I create a living trust?

Some websites like Nolo and LegalZoom allow you to create a living trust without the assistance of an attorney. You simply fill out necessary fields and follow the steps listed on the software.

Should I have a will as well?

In the end, it’s up to you whether you should create a will. It depends on your situation. Many attorneys suggest that you should still create a will as insurance that your trust is followed or in the situation that certain assets are left out of your trust. The will directs that the property be placed in a trust. A will is especially useful if you created an irrevocable living trust.

Can a trust override a will?

There are certain situations when a trust can override a will. This is usually in the case of an irrevocable living trust. If you give your house to the irrevocable trust, you give up your ownership of the home, meaning you cannot give it to someone in your will.

What does a good estate planner do?

After all, a good planner covers a lot of terrain, from analyzing the assets that make up your estate to helping you figure out who should be the executor, whether or not you need living trusts, irrevocable trusts, or trusts under a will.

How many questions should an estate planning lawyer ask?

But many people don’t realize that a good estate planning lawyer should also be asking you at least seven very important questions at the first meeting where you are deciding whether or not to trust and to hire that lawyer.

What does an estate planning lawyer need to know?

A good estate planning lawyer needs to know exactly what you want from the relationship, and what your personal and specific goals include.

What does a good planner consider?

Then, a good planner will also consider taxes, lifestyle issues — whatever else you want help with — and how that impacts the planning.

Do estate planning lawyers review documents?

So, a skilled and effective estate planning lawyer will be asking you to complete this type of document and to review it with them .

Is estate planning like cooking?

I often tell clients that effective estate planning is a lot like a cooking recipe.

Do special needs and disabilities matter in trust?

But, in today’s world drug and alcohol dependency, special needs and disabilities all matter very much and special trust provisions may be needed.

Is your primary focus on estate planning?

Proceed with a candidate only if they answer "yes" to this question. An estate specialist will be current with all changes to legal statutes and have the necessary strategic know-how to carefully word your documents in the most effective way possible.

Do you actually execute the plan?

Some lawyers merely draw up estate-planning documents, while others also execute the associated trusts. It's generally more efficient to retain a lawyer in the latter category, who can ensure that the correct assets are transferred into the trust.

Do you conduct periodic reviews?

For a small fee, some estate-planning attorneys will semi-annually or annually review your affairs. This can be important, as adjustments to your plan may be necessary if you experience a life change or a change in your finances. New legislative amendments also could potentially change aspects of your estate planning.

What is your estate tax experience? How can I best manage estate taxes?

Case in point: The Tax Cuts and Jobs Act of 2017 raised the estate tax and generation-skipping tax exemptions until 2025. 1

How do you charge?

Many estate-planning attorneys charge flat fees, instead of billing by the hour. Some do both, where they charge a fixed rate for standard services like establishing a trust, then charge an hourly rate for special research tasks. In any case, it's wise to inquire about compensation models ahead of time to avoid surprises.

How do you feel about a revocable living trust?

Putting assets into a revocable living trust can avoid the costly and onerous probate process (filing a will with the court). But this may not be the best move for everyone, because revocable living trusts don't avoid inheritance, estate, or income taxes. 2 Unfortunately, some lawyers recommend these structures simply so they can charge more money.

How long will it take you to complete my estate-planning project?

Give yourself enough time to gain a broader, big-picture perspective on your estate plan and the logistical practicalities of implementing it.