Setting up a trust is something that should never be attempted without the assistance of a reputable estate planning attorney! It’s also important to be knowledgeable when consulting your attorney so today we’re talking about what you need to know about trusts.
What You Need to Know About Setting Up Trusts
If you are unfamiliar with trusts, we advise that you take a moment to read our previously published article on trusts so that you have a better understanding of why they are an important aspect of planning your estate.
Attorney, Attorney, Attorney
We can’t state enough how crucial it is to find a reputable estate attorney who can help you with trusts, so let’s just say it one more time!
An attorney will ensure that you set up the right type of trust for your needs and they will be able to walk you through the legalese associated with the type of trust you are setting up. Why is this important? Because it makes sure that your trust is done by the book and nothing can be disputed in a court of law when it comes to validity.
How do you find an attorney to help you to set up a trust? If you live in or around St. Petes, Weidner Law can help with your trust needs. If you live outside of the Weidner Law service area, the best way to find a reputable trust attorney is to consult one of the professional organizations dedicated to attorneys involved in estate planning and trust law. One such organization is the American Association of Trusts, Estates and Elder Law Attorneys.
What Type of Trust?
Another important consideration is the type of trust that you want to set up! A reputable trust attorney will be able to help you set up the trust as well as decide which trust is right for you, but it’s helpful to have a basic idea of the types of trust before you consult with your attorney.
A revocable trust is often called a living trust and is a trust where the maker of the trust can alter, modify, change, or revoke the trust during their lifetime. This type of trust effectively transfers ownership of an asset to the trust rather than having ownership of that asset in the name of the trust maker. This type of trust generally becomes an irrevocable trust when the trust maker dies. This type of trust can avoid probate, however, it does not protect assets from creditors it simply makes them more difficult to access.
An irrevocable trust is a trust that cannot be altered, modified, changed, or revoked once it has been made. Property that has been transferred to an irrevocable trust cannot be taken out of trust.
Asset Protection Trust
An asset protection trust is a trust that can be used to protect assets from future creditor claims. These types of trusts are frequently set up outside the U.S. and are usually irrevocable for a number of years so that the trust maker cannot be a current beneficiary. Assets that have been undistributed under the trust are returned to the trust maker once the asset protection trust has been terminated and the trust maker regains complete control over those assets.
A charitable trust is designed to benefit a specific charity or the general public. These types of trusts are usually used as a means of reducing a gift or estate tax. A charitable remainder trust can also be used as a financial planning tool under the right direction.
This type of trust is an “implied trust” that is set up by a court and is determined by certain circumstances and facts. For example, although a trust may never have been formally declared, the owner of the asset had intentions for that asset to go to a specific person or purpose. Obviously due to the specifics of this type of trust, this is not one that can be set up with your estate planning attorney, however, it is a good thing to be aware of.
Special Needs Trust
A special needs trust is a trust that is set up for an individual with special needs who receives government benefits so that they will not be disqualified from those benefits. This type of trust can be used for items or services that the special needs individual may otherwise not be able to obtain. Special needs trusts must be set up very specifically to provide the best opportunities for the beneficiary and so as not to influence government benefits and usually include a clause that terminates the trust if it were to influence government benefit eligibility.
This type of trust is set up so that the beneficiary may not sell or pledge away any interest in the trust. A spendthrift trust protects properties from creditors until such a time as when the property is distributed to the beneficiary out of the trust.
Tax By-Pass Trust
This type of trust is designed to allow a spouse to leave money to their surviving spouse while limiting the federal estate tax that is paid on assets above the exemption amount upon the death of the surviving spouse.
A Totten trust is created by having the grantor of the trust deposit money into a financial institution account in their own name as a trustee for someone else. This is a revocable type of trust and the gift will not be made to the beneficiary until the grantor dies or until there is an unequivocal act reflecting the gift made during the grantor’s lifetime. This type of trust avoids probate but it cannot be used with real property.
Help With Trusts at Weidner Law
If you’re in the St Pete area and need assistance setting up trusts, Weidner Law can help! Practicing law since 1999, attorney Matt Weidner can help you to set up a trust fund for you no matter whether it’s a revocable trust, irrevocable trust, special needs trust, or anything in between! To get started, just call 727-954-8752 to make your appointment today!