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Trusts Attorneys

What is a Trust?

A trust is a fictitious legal entity that owns assets for the benefit of a third person (beneficiary). The grantor of the trust is the person who set up and gave money to the Trust. The trustee of the trust is the person charged with keeping the assets safe, invested properly, and finally distributed to the beneficiary at the proper time. The grantor can pretty much decide how the money must be kept—in interest bearing accounts, in real estate, or only in government insured Federal Deposit Insurance Corporation (FDIC) accounts, etc.—and when it may be distributed (when the beneficiary is 18 years old; or one half when the beneficiary turns 18 and the other one half when the beneficiary turns 21, etc.). The grantor of the trust can also be the trustee of the trust (e.g., grantor sets him/herself up to be the trustee of a trust for his/her child). This is called being the "original trustee."

There are many types of trusts you can set up. To list them all is beyond the scope of this document, but here are some of common trusts people set up. Consult with a trusts attorney to find out the best trust to set up for your situation.

Accumulation Trust
A trust in which the income is retained and not paid out to beneficiaries until certain conditions are met. For example, if you create a trust for your child's benefit that stipulates that he/she will not have access to the assets until he/she turns.
Bypass Trust (A-B Trust)
Designed for married couples with a combined estate of over $1 million (2002 - 2003). This amount, which is exempt from Federal Estate Tax, increases to 1.5 million in 2004 and 2005, 2 million in 2006 through 2008; 3.5 million in 2009 and then in 2010 there is no federal estate tax. However in 2011 the Federal Estate Tax is returned to the 2002 level.
Dynasty Trust
Estate and gift taxes are levied every time assets change hands from one generation to the next. Dynasty trusts avoid those taxes by creating a second estate that can sometimes outlive most of the family members. Dynasty trusts can survive 21 years beyond the death of the last living beneficiary at the time the trust was set up, so it can continue providing for future generations long after you're gone.
Living Trust
Prepared while you are still alive, the living trust allows you and your beneficiary to avoid the probate process. This trust is also an effective way to provide lifetime and after-death property management and estate planning.
QTIP Trust
QTIP trust stands for "qualified terminable interest property trust." It allows certain property to qualify for an estate and gift tax marital deduction even though it ordinarily would not qualify for such tax deductions.
Spendthrift Trust
Protects the beneficiary of your Trust from creditors.
Testamentary Trust
Unlike a living trust (made while you are alive), a testamentary trust is established through your Will at your death to handle your minor children's estate (financial affairs), should you die and there is no other living parent.
Totten Trust
Best for amounts of $20,000 or less.

Should I hire a Trusts Attorney?

Because of the potential tax implications and legalities involved with trusts, an experienced trusts attorney's counsel can save you and your family a lot of grief and expense. A skilled Lead Counsel Trusts attorney can explain all of your options and help you understand what type of trusts are right for you.