It’s important for everyone to think carefully about their estate, especially in the face of ill health or in advanced age. While you probably have some ideas as to how you would prefer to distribute your assets to your loved ones after your death, have you taken any firm steps toward making those plans official with a legally enforceable estate plan?

Everyone should have some type of estate plan in place once they have substantial assets and/or a family. Your estate plan can help your loved ones avoid an expensive and stressful probate process after your death, but only if you invest the time and effort into creating a legally enforceable and comprehensive estate plan with all the necessary components.

Understanding Modern Estate Planning

If you have not yet made any formal estate plans, it’s vital to understand the importance of modern estate planning and the benefits a robust estate plan can provide to your family. Ideally, your estate plan should include four main components:

  1. A will. This document outlines your last wishes concerning the care of your minor children and the distribution of your assets after your death.
  2. Power of Attorney designation. Power of Attorney allows the holder to make financial decisions on your behalf, effectively allowing them to sign in your place on any legal documents that would otherwise require your signature.
  3. Advanced medical care directive. This document outlines how you would prefer to handle life support and palliative care. Some people would prefer to have life support for as long as possible and as much medical intervention as is necessary to extend life. In contrast, others would prefer more natural palliative care or limited life support intervention under certain conditions or due to sincerely held religious beliefs.
  4. A trust. This document effectively places ownership over your assets in the hands of a trustee that you designate. There are many types of trusts and definitive advantages to having a legally enforceable trust in place at the time of your death.

An experienced estate planning attorney is one of your best assets if you are interested in creating a comprehensive estate plan. However, you are likely to find many free tools and software programs that claim to allow users to create their own estate planning documents. This causes many to wonder whether they actually need legal counsel to create their trusts.

Technically, the answer is no; you do not necessarily need to hire an attorney to create your trust. However, having an experienced estate planning attorney assist you in the creation of your trust will likely lead to a more robust, comprehensive, and legally enforceable trust.

Why Do I Need a Lawyer to Do a Trust?

There are two main types of trusts: testamentary trusts that take effect upon the death of the trustor or creator of the trust and living trusts that take effect while the trustor is still alive. Most people prefer living trusts because this form of trust offers a much higher degree of control. An estate planning attorney can help you understand the key differences, advantages, and potential drawbacks of the two main types of living trusts so you can make a more informed decision about your estate plan:

  • A revocable living trust allows the trustor to retain control over the contents of the trust, add more assets to the trust, remove assets from the trust, and alter the beneficiary designations within the trust. This is the more flexible of the two types of living trusts, but this flexibility comes with a catch: since the trustor retains a measure of ownership over the contents of the trust, the trust is not shielded from creditors. Additionally, the contents of a revocable living trust are also subject to estate taxes at the state and federal levels.
  • An irrevocable living trust, as the name suggests, does not permit any alteration of the terms or contents of the trust after its creation. While it is technically possible to alter the nature of an irrevocable living trust under certain conditions, the process is complex and demanding. While some may see the inability to alter the terms of the trust as a disadvantage, the benefit of this form of trust is the fact that since ownership transfers immediately rather than upon the trustor’s death, the contents of the trust do not qualify as the trustor’s property. This effectively immunizes the trust from estate taxes and can help the trustor’s family completely avoid the probate process.

These are just the basic differences between the two main types of living trusts. An experienced attorney can help their client determine which of these options provides the most advantages and guide them through the entirety of the creation process. Ultimately, the process of creating a legally enforceable trust of any kind can be exceedingly difficult for the average person, especially someone who owns a substantial estate with several complex assets. Having legal guidance for this process can be invaluable.

Benefits of Legal Counsel for Trust Creation

You may only need to spend about $100 or more for the software you would need to create your own trust. Compared to the average cost of legal counsel for trust creation, it may seem like the do-it-yourself option is the obvious choice. However, you must consider the value that a trusts lawyer can provide in this process.

First, your attorney will be able to determine which type of trust would suit you and your family best. If you wish to avoid probate, minimize your estate tax liability, and ensure the best level of legal protection over the contents of your trust, call our firm. It is best to consult an experienced trusts lawyer for assistance in this process.

Your estate planning lawyer can also help you align the various elements of your estate plan in fine detail. For example, if you have a trustee in mind, your attorney can ensure this individual is legally designated as the executor of your estate and your Power of Attorney. This will effectively roll all responsibility for the different components of your estate plan into one place. Your attorney can also create a hierarchy of your preferred trustees in the event your first choice cannot or will not assume this responsibility. Your attorney can allow you to clearly outline your second, third, and even fourth choices for trustee.

Another reason to hire an experienced trusts lawyer to help you create your trust is to avoid beneficiary designation conflicts. Your trust may include bank accounts, retirement accounts, securities, and other assets, and when you created these assets, you probably designated beneficiaries for each of them. If your trust contains conflicting beneficiary designations, this can lead to significantly disruptive probate issues for your family. An experienced attorney will help you carefully review every element of your trust to ensure all beneficiary designations align with your current goals.

Finally, if you own complex assets like securities and other investments, navigating the legal red tape that often surrounds these assets can be very difficult without legal counsel. Your estate planning attorney can help in this regard by consulting financial experts and tax professionals on your behalf, performing detailed research, or even restructuring certain assets if possible.

How to Start Trust Creation

Anyone can take advantage of the affordable estate planning tools available today. Still, it is unwise to rely solely on these programs to have a comprehensive and enforceable trust. However, you can consider the do-it-yourself approach as the starting point on the way to creating the trust you want. For example, using a software program to create your trust will force you to research your assets and property deeply. You will need to find your ownership documents for each asset you control during this process. You will also need to carefully review the elements of each of these documents to ensure they align with your goals and expectations for your estate.

This initial fact-finding process is incredibly valuable. In many cases, someone performing their due diligence in trust creation will uncover valuable pieces of information they may have never thought to seek. In other cases, it’s possible to reveal information that is cause for concern. If you reach this stage in trust creation on your own, you will have a solid amount of documentation to bring to an estate planning lawyer, effectively allowing them a head start on the creation of your trust.

Find a Trusts Lawyer in California Today

Ultimately, the trust creation process can be exceedingly difficult for anyone who controls a substantial estate or complex assets. If you want to start the estate planning process but do not fully understand your options, it’s best to consult a trusts lawyer as soon as possible.

At the Law Office of Christopher P. Walker, our team has successfully helped many clients create trusts that align with California and federal law while providing them and their families with financial security and peace of mind. If you are ready to take estate planning to the next level and create any type of trust, our team is ready to assist you. Contact the Law Office of Christopher P. Walker today for more information about the trust creation services we provide.