A lawyer specialized in trust and estate matters can help with reducing estate taxes, designating heirs for your assets, and avoiding probate. If you are wondering how you can find a lawyer for your trust fund, consider asking family, friends, and business associates for referrals. Searching the internet for trust fund lawyers near you can also yield results.
Creating a trust fund can leave a lasting legacy for your loved ones and support charitable causes close to your heart. Morgan & Morgan’s experienced trust fund attorneys can help create the legacy you envision and protect your hard-earned assets. Contact us now for free advice on how to get started.
What Is a Trust Fund?
Trust funds are separate legal entities that can hold property, money, stocks, or even businesses as assets. Trust funds can be set up for various reasons but are typically utilized as estate-planning tools benefiting individuals, an organization, or future generations. By creating a trust fund, individuals formally state how their assets will be gathered and distributed in the future.
The three parties making up a trust are:
- The grantor
- The beneficiary or beneficiaries
- The trustee or trustees
The “grantor” or “settlor” is the person donating the assets and creating the trust. The individual benefitting from the trust is the “beneficiary”. However, the assets do not belong to the beneficiary. The trust will be managed by the “trustee,” according to the grantor’s wishes. Grantors are free to assign a professional, corporation, relative, or even a close friend as a trustee. They could also designate several trustees.
Common Types of Trust Funds
Trust funds generally fall into two categories: those in effect while you are alive and those enacted after you have passed away. Trusts can be revocable or irrevocable. Revocable trusts can be changed or dissolved by the grantor while alive.
Revocable living trusts, for example, generally convert into an irrevocable trust when the grantor passes away. It is not possible to alter irrevocable trusts once they are created. Irrevocable trusts can protect assets from creditors and tend to have more tax benefits than revocable trusts. Examples of popular trusts include:
According to Forbes, living trusts are the most popular type of trust fund. With a living trust, assets are placed in trust for your benefit while you are alive, and provisions determine what happens to these assets when you pass away. Most living trusts are “revocable,” meaning that you can cancel or change them at any time.
Special Needs Trusts
A special needs trust can be an excellent way to plan for the future of a loved one with special needs. The trust allows the beneficiary access to funds without potentially losing benefits from public assistance programs, such as Social Security. Public assistance is subject to income and asset restrictions. However, money and assets held in a special needs trust do not affect an individual’s eligibility for public assistance.
Spendthrift trusts are irrevocable and can either be testamentary or living. The purpose of the trust is to limit a beneficiary’s access to assets contained in the trust. Spendthrift trusts can be useful when the grantor is concerned about a beneficiary or creditors accessing the trust and diminishing the principal. However, not all states recognize spendthrift provisions.
Medicaid Asset Protection Trusts
Establishing a Medicaid trust can help with preserving assets. Money and assets placed in this irrevocable trust will not count against you for Medicaid eligibility.
The Benefits of Trust Funds
Trust funds can have many benefits for grantors and beneficiaries. Above all, setting up one or several trusts can ensure that your estate is distributed as you see fit, whether to your family, loved ones, or any charities you wish to support. Other notable benefits include:
- Trust funds are private
- Trust funds can shield your assets from potential litigation and probate expenses
- Some trust funds provide tax benefits
- Trusts can provide a monthly allowance for a minor
- Trust funds, unlike wills, can cover life insurance and retirement plans
- A trust can designate assets for future generations
- A trustee can act on your behalf should you become incapacitated
When to Consider a Trust Fund
A trust can be a useful estate planning tool for anyone who owns property and assets. However, if you have a family, a child with special needs, or considerable assets, a trust fund can benefit you and your loved ones in many ways. Trusts can be an excellent tool to help avoid probate and protect assets for children and grandchildren. You can also use trusts to lower the estate tax burden for beneficiaries.
Do I Need a Lawyer for Setting up a Trust Fund?
You could potentially create a trust fund on your own. However, there can be pitfalls with the do-it-yourself approach. A minor mistake on the document could invalidate your trust. Moreover, when funds are not adequately allocated, a trust could be useless for the beneficiaries. If you are considering creating a trust fund, a trust lawyer can fund the trust correctly and ensure that all the paperwork is legally valid. In the following circumstances, working with a lawyer can be vital:
- You have a dependent relative or child with special needs
- You are unsure about how to fund the trust
- You have significant assets
- You want to include provisions about how or when beneficiaries receive assets
Even if your trust is relatively straightforward, consider seeking advice from an experienced trust fund lawyer who can advise you of state-specific laws or review the trust you created. Working with a trust attorney can be a good investment and save you and your family money in the long term.
How Do You Find a Lawyer for Your Trust Fund?
While estate planning may not be the most preferred topic of choice for small talk, consider asking friends and family members for attorney referrals. You could also search online databases such as Avvo and Martindale for estate and trust fund attorneys.
What to Look for in a Trust Fund Attorney
Most individuals needing help with estate planning would be well-served by a generalist who can draft a will, designate powers of attorney, and set up a basic trust. However, if you have specific needs, such as maximizing benefits from Medicaid, you may wish to speak to an attorney who specializes in elder law, for example. In any case, your attorney should have experience with all kinds of trust funds and be able to advise you comprehensively. They should also:
- Be enthusiastic and motivated to help you
- Be eager to answer your questions and concerns
- Have an office near you
- Have good client reviews
A large law firm such as Morgan & Morgan can draw on the expertise of hundreds of lawyers and help you find a good fit for your specific estate planning and trust fund needs.