What Does a Trust Attorney Do?

A trust attorney drafts your trust, prepares your will and related documents, and helps you make informed choices with your overall estate plan.

Drafting and Structuring Trust Documents

One of the primary responsibilities of a trust attorney is to draft the legal documents required to establish a trust. Creating a trust isn’t as simple as filling out a form. The document must be carefully structured to reflect the grantor’s (the person establishing the trust) specific wishes while complying with state and federal laws.

A trust attorney works closely with you to understand your objectives—whether it’s providing for your children, minimizing taxes, or protecting assets from creditors—and drafts a document that addresses your unique situation.

Additionally, a trust attorney ensures that the trust aligns with your overall estate plan. For example, they’ll consider how the trust interacts with your will, powers of attorney, and any other legal instruments you may already have.

Helping You Choose the Right Type of Trust

Not all trusts are the same. A trust attorney should advise you on which type of trust best suits your needs.

There are revocable trusts, irrevocable trusts, special needs trusts, charitable trusts, and more. Each type of trust serves a different purpose and comes with its own set of advantages and disadvantages.

A trust attorney should take the time to explain the differences between these types of trusts and recommend the best option for your financial and family situation.

For example, if your primary goal is to maintain control of your assets during your lifetime while avoiding probate, a revocable living trust might be ideal. On the other hand, if asset protection from creditors is your top concern, an irrevocable trust or offshore trust may be the better choice.

Even after choosing a trust type, there are many different ways you can customize the trust to meet your objectives.

Funding the Trust

Once the trust is set up, it needs to be funded. Funding the trust means transferring assets into it.

If an asset is not transferred to the trust, the trust agreement will not control it.

A trust attorney will help you retitle assets, such as real estate, bank accounts, and investments, so they are legally owned by the trust.

They’ll also advise on how to handle more complex assets like business interests or intellectual property. Properly funding your trust ensures that the trust will operate effectively, protecting your assets according to your wishes.

Advising Trustees and Beneficiaries

Once a trust is established, the role of a trust attorney doesn’t end there.

A trust attorney should provide ongoing advice to both trustees (the individuals or institutions responsible for managing the trust) and beneficiaries (those who will receive assets from the trust).

In particular, a trust attorney can help a trustee understand their fiduciary responsibilities and can ensure that they manage the trust following both the trust document and applicable laws.

Trustees may need to make decisions about distributing assets, investing trust funds, or filing tax returns. A trust attorney can provide legal guidance in these areas.

For beneficiaries, a trust attorney can clarify their rights under the trust and assist if any disputes arise with the trustee.

Handling Trust Modifications or Termination

Over time, your financial situation or family dynamics may change, necessitating updates to your trust.

With a revocable trust, modifications are generally straightforward, as the grantor retains the power to make changes during their lifetime.

For irrevocable trusts, modifications are more complicated, but in some cases, they can still be made. A trust attorney can guide you make changes to an existing irrevocable trust in a legal way.

Sometimes, it may be necessary to terminate the trust altogether, either because it has fulfilled its purpose or because it no longer serves your needs. A trust attorney will help you navigate the legal requirements for terminating a trust and distributing its assets, ensuring that the process is carried out correctly.

Tax Planning and Compliance

Trusts have tax implications. Depending on the type of trust, the assets within it, and how distributions are made, a trust may be subject to income taxes, estate taxes, or gift taxes.

Trusts can be taxed at high rates if not properly managed, so a trust attorney will help you stay compliant with federal and state tax laws, avoiding unnecessary tax burdens.