If you plan to create a living trust or already have one, you may wonder if you need a living trust lawyer. The short answer is that you don’t. But just because you don’t technically need an attorney to put together your trust doesn’t mean you shouldn’t hire one. Living trusts can be complicated and if you worry about your own ability to create a trust, you may want to hire a living trust lawyer who you can consult with. Living trust lawyers can help your trustee distribute assets after your death, keep your information private and avoid probate. You may also want to work with a financial advisor who can help you create the right estate plan.
When Do You Need a Living Trust Attorney?
Everyone will feel differently about how much their net worth should be before they need a living trust attorney. Certainly, there are no hard and fast rules on when you should hire one. But you should strongly consider enlisting the help of a living trust attorney if:
- Passing on Assets: If you have a lot of assets that you want to pass on to family members. If you have more than $100,000, for instance, you may want to enlist the services of a living trust lawyer. Perhaps not, however, if your financial portfolio isn’t complicated and your will states that one or two family members will get your money.
- Special Trust Conditions: If you have certain conditions attached to the trust then it might be right to hire a lawyer. For instance, if you want your money to go to some key family members but not others, such as your grandchildren instead of your kids or you only want the assets to go to a beneficiary if they meet certain conditions that you have set up. (In fact, if you give money to your grandchildren instead of your kids, you may want your attorney to set up what is called a generation-skipping trust.)
- Tax Liability: If you are going to owe federal estate tax. The federal estate tax exemption for 2023 is $12.92 million. If your estate is larger than that, you will owe estate taxes. That said, even if you have an estate worth less than $12.92 million, you would likely want to hire a living trust attorney.
- Unique Beneficiary Situation: If one or more beneficiaries have a unique situation then it can be another reason to use an attorney. For instance, if one or multiple beneficiaries has special needs or is receiving assistance from the federal government, a living trust attorney could be very helpful. You don’t want to risk setting something up yourself only for your beneficiary to someday learn that you did it wrong.
- For Peace of Mind: If you simply have a complicated estate and are overwhelmed by the idea of setting up a trust.
In short, the more complex your estate is and if you have a lot of wealth to give away and perhaps property as well, the more of an argument you have for hiring a living trust lawyer.
Should I Make My Living Trust Lawyer the Trustee?
That sounds like a good idea and one that would make life more simple. But some experts advise against it, simply because a living trust attorney is essentially taking on two roles, that of consultant and that of trustee and there may be ethical conflicts. For example, an attorney is supposed to take on a fiduciary role, adhering to what is known as fiduciary duty and acting with the client’s best interests at heart, ahead of their own.
So right at the outset, most attorneys could probably suggest someone just as qualified to run a trust who might work for a less expensive fee. It isn’t that you can’t or shouldn’t hire your living trust lawyer to be the trustee, but you do want to give it careful consideration before offering them that job.
If you don’t believe a family member has the necessary time or expertise to be a trustee, you might consider hiring a bank or trust company to act as your trustee. Still, just as having an attorney act as a trustee will be expensive, there will be fees involved with a bank or trust company as well, money that will come out of the assets you’re leaving behind. The cost may be worth it, but at the same time, a family member who is a trustee can be paid for his or her services and that may sit a little better with you. Still, it does come down to your own trust level of the qualifications of the trustee.
The Bottom Line
If you’re wealthy enough to need a living trust, your estate probably could use a good living trust attorney, though, again, it really comes down to how complicated your financial picture is. It’s expensive to hire attorneys and the temptation is always going to be to try and create and maintain a trust without lawyers.
You can certainly go that route and for some people, it isn’t difficult to navigate estate planning and taxes and red tape. They enjoy it. But for the rest of us, spending resources to hire a lawyer, such as a living trust attorney or an estate planning attorney, can be a smart way to make sure we don’t waste our money.
Tips for Estate Planning
- When you’re planning out your estate it’s important to make sure you think through all of your assets and exactly how you want them to be protected. Getting the advice and help of a professional, like a financial advisor, could be key to doing it correctly. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- If you’re wanting to make an estate plan on your own then you’ll need to make sure you can reliably cross the t’s and dot the i’s. A good start to that is checking out our estate planning checklist.
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