It's always a good idea to work out end-of-life and estate legacy details well in advance to benefit your family's legacy and to avoid family financial squabbles after you're gone. For some, this means hiring a trust lawyer and setting up a family trust. But is this the right choice for you and your loved ones? Here are a few of the pros and cons of hiring a trust attorney to create your own family trust.
Avoid Probate Court
The number one reason to hire a trust attorney to set up a family trust is to avoid probate court. After the death of a loved one, his or her estate goes into probate court, a legal process that ensures that all the debts of the deceased are paid and assets are distributed according to the laws of the state. Probate can be time-consuming and costly for the family. Setting up a trust helps the family avoid this process.
A trust can also benefit a person while they are living in the form of tax benefits. When you put your assets into a trust, you can avail yourself of the many tax benefits like capital gains discounts, especially when it comes to investments
Protection From Creditors
Another major benefit of a trust is to protect your assets from creditors. When your estate is placed in a trust, the estate belongs to the trust rather than the beneficiaries so it becomes much more difficult for creditors to try to seize assets from beneficiaries.
There is a cost to setting up a trust including attorneys fees and filing fees. There may also be continuing fees for the trustee, the person in charge of managing the trust. However, the savings can be massive if the trust prevents litigation at a later date.
The trustee has a significant amount of power and responsibility so it's vital to choose the right person for the job. The trustee is legally liable for any debts the trust owes, so the trustee's position can also become risky. The trustee is also responsible for distributing the assets of the trust according to the procedures laid out. Improperly planned procedures can result in disputes that can become a headache for the trustee. That's why it's vital to set up the trust using an experienced trust attorney to help you navigate the appropriate procedures and trustee appointments or replacements.Share