Do I Need An Attorney To Set Up A Living Trust?

Most people who attempt to set up a living trust without the assistance of an experienced estate planning attorney choose to do so for the following reasons:

1. They want proper estate planning; but
2. They want to save money.

We understand. Hiring an attorney to assist with setting up a living trust costs money and, other than the trust document itself, you get nothing tangible in return immediately after.

However, what you should get is the satisfaction that comes with knowing that you have taken steps to provide for your loved ones and their future. We often say that our product is “peace of mind.” But you will only get that satisfaction if you are confident that the living trust you set up will achieve the estate planning objectives you intend it to achieve.

A living trust can save your estate and loved ones a great deal of time and money after you pass away, by enabling your assets to bypass probate and pass on directly to your heirs, and providing for wise administration of substantial sums of money. A properly drafted living trust gives you the ability to dictate how and when those assets can be inherited, and puts measures in place that keep your heirs from squandering their inheritance, or losing it to lawsuits and creditors.

A living trust can also be used to plan for the management of your assets and affairs in the event you become incapacitated during your lifetime, and to avoid the time and expense of conservatorship proceedings. But when you attempt to save money by setting up a living trust without the assistance of an experienced attorney, you risk making costly mistakes that can render your living trust ineffective and ultimately cost you and your estate more money in the end.

What is a Living Trust?

A trust is not simply a legal document, it is a legally binding arrangement between one party known as the Grantor and another party known as the Trustee. Simply put, a trust is a contract. In the contract, the Grantor creates a trust and funds it with their assets, which will then be managed by the Trustee (which is typically themselves) for the benefit of a third-party, known as the Beneficiary.

There are many different types of trusts, each created to achieve specific estate planning goals. The most common of these is a revocable living trust.

A revocable living trust is one that is created and effective during the Grantor’s lifetime. It is revocable because once created, it can be revoked or amended by the Grantor as long as he or she is alive and has the capacity to do so. In a living trust, the Grantor-Trustee is also the initial Beneficiary.

How Does A Revocable Living Trust Work?

With a revocable living trust, the Grantor acts as the Trustee while they are alive and well. This allows them to transfer assets to the trust, while retaining access to and control over those assets.

The Grantor can transfer assets into the trust, take assets out of the trust, or even revoke the trust entirely. In addition, the Grantor can designate one or more Beneficiaries who will benefit from the trust assets and the income they generate.

The Grantor can also designate one or more Successor Trustees. This person will step in when the Grantor passes away (or becomes incapacitated) to manage the trust and distribute its income and assets to the trust Beneficiaries per the terms of the trust.

How to Set Up a Living Trust

Attempting to set up a living trust on your own can cause you to waste a considerable amount of time and money, and can hurt your loved ones future interest. To understand why, you must first understand what a qualified attorney does for you when setting up a living trust on your behalf:

• Assist you with identifying what assets you should transfer to your trust;
• Advise you on designating Beneficiaries and setting the terms that need to be included to best provide for them;
• Help you with choosing a Successor Trustee and drafting the instructions by which they will manage the trust;
• Help you with funding the trust with your current assets, and with creating a Pour-over Will to catch any assets remaining outside of your trust at the time of your death.
• Help you avoid the many pitfalls of inappropriate, poorly drafted, or ineffective trust provisions.

The Problem With Setting Up A Living Trust On Your Own

A living trust is a complicated legal document that must be properly drafted by a knowledgeable estate planning attorney. If you are thinking of using one of the many do-it-yourself estate planning templates you can find online, beware.

These generic templates are created to fit the needs of the general public. But when it comes to trust planning, a one-size-fits-all document rarely works.

A trust must be drafted to address your specific estate planning needs and desires. Otherwise, it can cost your loved ones a considerable amount of time, energy, and money, but then provide them with very little benefit, or even none at all.

Furthermore, if your trust is not set up or funded properly with your assets, then after you pass away, your loved ones may still need to go through a lengthy and expensive probate process before they can access the resources they need to support themselves.

What’s more, if you have adult children who are bad with money, or who struggle with gambling, alcohol, or substance abuse issues, they could quickly squander their inheritance away if it is not being managed for them through a carefully drafted trust.

Contact an Experienced Virginia Estate Planning Attorney

While it is not required to engage an attorney to set up a living trust, a good estate planning attorney can help you set up a trust that is properly drafted and funded, and that prepares for all the potential risks to you, your assets, and your loved one’s future interests.

Our law firm works with clients every day to create effective estate plans, including living trusts. Call us today at (703) 553-2577 or use the contact form to schedule a consultation with an experienced Virginia estate planning attorney, and to find out how we can help you.

The information on this site is for general informational purposes only. The information presented in this site is not legal advice or a legal opinion. You should seek the advice of legal counsel of your choice before acting upon any of the information in this site.