The creation of a trust can be very useful for anyone wishing to generate wealth through investment, tax minimisation and distribution. However, such a device comes with its legal responsibilities. This lies in the trustee-beneficiary relationship that is established in the creation of a trust. Such fine details would best be advised upon by seeking out a trust lawyer.
However, depending on the purpose and longevity of the trust, it is important that you question the trust lawyer you are looking to work with in order to gain the best possible advice that will your favour your interests in the long term. Below are 5 questions you should ask your prospective trust lawyer.
What experience do you have and how much will you charge?
The quality of a trust lawyer derives from the number of years they have been catering in the industry. The simple formula follows that the higher the number of years the lawyer has been employed = the greater the peace of mind the client should have. A lawyers with more experience in the industry will have encountered multiple situations involving wills, trusts, health documents and estates. They will have the flexibility to deal with your current situation and your possible future situation should you employ them.
Cost is another critical question that you should be asking your lawyer. There are currently two main forms of payment in the legal industry.
Billable Hours
In this form of payment, lawyers will charge you a fee for every hour that is spent with them. You should look to outlining all of your issues and details in a concise manner so that you do not incur additional fees for extended the period of time.
Flat Fee
This payment is the most popular method of payment amongst estate trust lawyers. However, this does not mean you will not incur additional fees as this one payment does not include disbursements.
It is important to ask your lawyer about their costs so as not to incur hidden fees.
Who should I have as my trustee(s)?
Deciding upon your trustee(s) will depend on your assessment of the level of integrity that that entity may have. It will also depend on the largeness and complexity of your trust. Trustee(s) will be making decisions based on the beneficiaries best interest and will also have a fiduciary relationship with these beneficiaries. This entity will also hold the legal title to a trust, which relates to the proper management of property and other assets owned in the trust. A trustee(s) must also understand the responsibilities that are underpinned in the trust agreement; things such as tax affairs and the complexities of tax law must also be accounted by the trustee(s).
For such a role, a trust lawyer may advise you to make him/her the trustee due to their experience and specialisation in trust management. Equally, the lawyer can advise you towards a another qualified individual or even a company (known as a corporate trustee).
Visit the ATO’s webpage on Trustees and Beneficiaries to gain an understanding of the responsibilities that a trustee must undertake.
What can I expect as an outcome?
Depending on the complexity and purpose of your trust and/or your chosen trustee(s), a trust lawyer will advise you a suitable trust structure that is compatible with your needs. As stated previously, a trust lawyer will ensure the integrity of the trustee-beneficiary relationship by properly advising your choice of a suitable trustee.
More importantly, a trust lawyer will secure your rights in the trust due to their thorough understanding of the inhibitions of the fiduciary relationship with beneficiaries. Put simply, a trustee will be imposed with both trustee duties as as well as fiduciary duties which may often differ. For example, a trustee may which to purchase assets on his or her own trust account — this will fall out of the conditions set in the trust relationship and are instead considered to be arising from the wider fiduciary capacity of the trustee. Thus, a trust lawyer’s analysis of your trust rights can provide you useful advise on the flexibility of your trustee duties.
All in all, you can ensure that a trust lawyer will manage your trust while you are still living or after death.
Are you able to install my assets into a Revocable Living Trust?
A revocable living trust is an alterable trust in which the assets that come with the title of property are transferred into a trust. The trustmaker servers as the initial trustee and has the ability to remove the property from his or her lifetime.
Revocable living trusts ensure the avoidance of probate (and the costs of probate) due to the assets of the trustmaker (you) being owned by the trustmaker at the time of their death. However, this does not ensure asset protection due to the trusts availability to the trustmakers creditors. While it may be difficult to for these creditors to gain access to these assets through court, it is nevertheless still available.
Some trust lawyers do not account for the additional funding needed in a revocable living trust. They may fail to give guidance on the importance of funding in order to keep your trust viable after you die. Thus, it is important to work with a lawyer who will oversee this funding process because their is a chance you won’t be able to complete this funding on your own.
For other types of trusts, visit findLaws webpage on all the different types of trusts. Different trusts provide unique features and advantages that you may wish to look at in discussions with your lawyer.
Can I see myself working with this trust lawyer?
Comfortability is key factor in the fiduciary lawyer-client relationship. It will be a necessity to share some of the intimate details of your life in order for your lawyer to give you the best advice. If you are not comfortable with your trust lawyer, chances are that you will hold certain things back. This is an important factor to consider when possibly choosing your lawyer as your trustee over your lifetime. Your relationship will be integral to the efficacy of your trust, be it for financial gain, the conservation of your assets in disputes or even the distribution of your assets after death.
Do not be afraid in deciding that a prospective trust lawyer may not cater your needs. It is better to decide on these things earlier instead of wasting time and money.
“Ask, and it shall be given; seek, and ye shall find.”
Properly questioning the integrity of your prospective trust lawyer is, in itself, an indicator that you are looking out for the best interests of your trust. You should be proud knowing that your efforts will find you the best possible trust lawyer to manage the your trusts assets in your lifetime and possibly after you die.
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