Wondering why you need a lawyer to set up a trust? If your assets and instructions are simple, you might not.
But for complex trusts with significant assets or many beneficiaries, an attorney can be valuable.
Even if you don’t hire one, a free consultation with a local estate planning lawyer is recommended.
Get insights on when legal assistance is essential and when it might not be.
What is a Trust?
A living trust is a document made by the grantor, allowing asset management and distribution to specific beneficiaries after their death.
It’s part of an estate plan. Once assets are transferred, they’re owned by the trust and managed by the trustee.
The trustor can also be the trustee until incapacitation or death.
Trusts serve financial purposes and asset transfer, with common types like revocable, irrevocable, and testamentary trusts.
Revocable Living Trust
A revocable living trust is created while the grantor is alive and becomes irrevocable after their passing or incapacitation.
Benefits include end-of-life instructions, reduced probate fees, accessible assets for beneficiaries, and privacy.
As assets remain grantor’s property, creditors can claim them and taxes are still owed on them.
These types of trusts are also called “trusts under will.” Unlike a living trust, these are created by a will after the grantor’s death. A testamentary trust can help to:
- Preserve assets for children from past marriages
- Financially provide for your spouse after your death
- Leaving money behind for beneficiaries with special needs
- Gifting money to charitable organizations
An irrevocable trust can’t be altered without beneficiaries’ permission.
Grantor loses ownership rights upon funding.
Reasons to create include tax benefits, controlled asset distribution, favorable home gifting tax rules, and maintaining government benefit eligibility.
Do I Need an Attorney To Set Up a Trust?
Legally, no. You can create your trust without a lawyer. Include trustor’s, trustee’s (usually you), and successor trustee’s names, intended beneficiaries, and disbursement instructions.
Verify state laws; some need notarization and witnesses.
For intricate trusts or financial goals, consulting an estate planning lawyer is wise.
Pros and Cons of Hiring an Estate Planning Lawyer
The more complex your estate plan, the more likely you need an attorney for an effective trust.
Consider hiring one if you have high-value insurance, beneficiary conditions, generation-skipping, or funding needs.
An attorney ensures financial protection for you and beneficiaries.
For assets like stocks or real estate, an experienced attorney is beneficial.
Estate planning lawyer costs vary, around $2k – $7k upfront plus hourly fees.
Research beforehand, especially if setting up a trust without legal assistance.
What Are The Benefits of a Trust
Trusts are versatile tools that were once exclusive to the wealthy. Now, they benefit various income levels by allowing you to:
- Specify asset distribution after death
- Minimize estate and gift taxes
- Avoid probate expenses and publicity
- Safeguard assets from creditors and lawsuits
- Name a successor trustee
Probate can cost 10% of your estate’s value. Trusts help evade these fees, saving money for you and beneficiaries.
Depending on your goals, assets, and instructions, consult an estate planning attorney to choose the right trust.
Tips To Reduce The Costs of Setting Up a Trust
High trust lawyer costs deter many, despite the clear benefits.
Paying thousands upfront isn’t always feasible. To save on trust setup with attorney help:
- Research state laws and requirements.
- Define your asset goals and beneficiaries.
- Handle some tasks yourself, use unbundled attorney services for the rest.
Save Money with an Unbundled Lawyer Today
Cut costs by hiring a trust lawyer for complex tasks while you handle the rest. Unbundled attorneys charge $500-$1500 upfront.
For complex needs, they provide full representation at reasonable rates.
Before spending thousands, connect with a local unbundled trust attorney to potentially save on estate planning.