A trust creates a fiduciary relationship relating to property. This means that the person with title to the property has certain duties to hold and manage the property. The person who has the duties is called the trustee.
The terms of this relationship are usually described in a written document, which is commonly called a trust instrument, trust agreement, declaration of trust or simply, a trust. Many people create trusts as part of their estate planning.
Trusts are often created to control the distribution of assets, protect assets for minors or persons who are unable to manage assets themselves, and to reduce or eliminate taxes and future attorney fees. A significant advantage of a trust is that it’s flexible, avoids probate and the information in the trust is not open to the public.
You may have heard of the term "living trust" or “revocable trust,” both of which refer to the same type of trust – a revocable grantor trust. In this type of trust, the “grantor”, or maker of the trust, is the trustee of the trust and is also the beneficiary of the trust during his or her lifetime. A successor trustee is named to serve if the grantor becomes disabled or dies. Beneficiaries are also named in the trust to receive assets at the grantor’s death. The grantor may revoke or modify the terms of the trust at any time until he or she dies or becomes legally incapacitated. This right to revoke and modify the trust gives the grantor flexibility with his or her assets, making this type of trust the one people most often choose.
Bill Ager is an experienced attorney who can help you determine if you need a trust, and if so, what type of trust will fit your estate planning needs. Bill strives to provide customized services that preserve assets for his clients and their families while reducing estate planning expenses.
Contact Bill Ager at (734) 649-0784 or at firstname.lastname@example.org for more details on reasonable flat fees for these services.
Can I make my own trust without an attorney and use the “trust kits” that are advertised on the internet and in publications?
There is no legal requirement that you must use the services of an attorney to draft your trust. However, you may wind up with a trust that has little or no effect.
“Trust kits” provide a number of generic fill-in-the-blank forms that are not tailored to your specific situation and needs. It is also important to understand that once a trust is created it must be “funded” so that one of the essential purposes of the trust, avoiding probate, is achieved. Many times, there are insufficient instructions in the do-it-yourself trust kits for funding the trust, or transferring assets owned by the grantor into the name of the trustee.
If this is not done, the assets will have to go through probate at the death of the grantor. Failure to fund the trust properly is one of the biggest reasons trusts fail. It is always a good idea to work with an experienced attorney to make sure your estate planning goals will be realized.
Is a revocable grantor trust expensive to create?
Usually, the fee for preparation for a revocable grantor trust exceeds the fee for the preparation of a will. This is in part because of the extra time required to draft the trust and related documents, such as a pour-over will and comprehensive transfer documents, and providing assistance with signing of all documents and funding the trust.
However, the overall cost is still very affordable, especially compared to the expense of probate or litigation over an estate with an unclear or non-existent estate plan. Although attorneys usually bill by the hour, Bill Ager will complete the necessary work for a reasonable flat fee.
Can I just use a trust or will for my estate planning?
Even if you have a trust, you should also have a will, which is called a “pour over will”. A pour-over will transfer any property solely owned by the grantor/testator at death to the trust. In this way, it "pours" the probate estate over into the trust.
Although the grantor may have transferred all of his or her property to the trust to avoid probate, a pour-over will is needed to act as a safety net, catching any property that was not transferred to the trust before death.
In addition to either a trust with pour-over will, or a simple will, it is highly recommended that everyone have a power of attorney appointing a person to make for health care decisions and financial decisions if a person becomes incapacitated or disabled. A power of attorney will speak for you at a time when you can no longer speak for yourself.