Have you ever wondered whether you should go for a trust or a will? How are both of these different?

Is a living trust a necessity in one’s life?

How do you ensure that your belongings and property are legally distributed exactly how you want them to be? 

Are there any common mistakes you can avoid when creating a trust or will?

If you set up a trust, can you save money by paying taxes? Is there any proper way for you to protect your assets for the next generation?

Through this article, we aim to introduce you all to the discipline of trust and estates law.

A Brief Introduction To Trusts And Estates Law

Trusts and estates law deals with the rules and regulations related to what happens to a person’s property and belongings after they pass away. Certain aspects of it also make provisions for people who no longer have the physical or mental capacity to carry on (living trusts and living wills).

The process requires us to create complex legal documents, like wills and trusts. These documents ensure that the government carries out distribution according to the wishes of the maker. They ensure that the assets and properties diligently get transferred to family members or others they care about. 

This area of law also covers how to handle money or property for the benefit of someone else, such as a child or a charity, even if the person who owns it is no longer alive.

What Is A Trust?

A trust is a legal means that allows one person to transfer their assets to others. Through a trust, the others in question have the right to hold and manage these assets for the benefit of the beneficiary, as chosen by the one making the trust.

 These are the important elements of a trust.

A Trust Creator

The person who creates the trust is the one who owns the assets and decides to put them into the trust.

A Trustee

The trustee is the person or institution responsible for managing the assets in the trust and following the rules set out in the trust document.

A Beneficiary

The beneficiary is the person or group who will benefit from the assets held in the trust. The beneficiary is chosen by the trustee. They receive benefits, like receiving money or property, from the trust.

A Trust Property

The assets involved in the trust, like money, real estate, investments, or valuable possessions, are called trust property.

A Trust Deed

The legal document that has all the rules and instructions for the trust is called the trust document or trust agreement.

Each Trust Has A Purpose

The trust document states the purpose of the trust and how the trustee should manage and use the assets for the benefit of the beneficiaries.

Revocable Trust vs. Irrevocable Trusts

Trusts can be either revocable. These can be changed or canceled. They can also be irrevocable, which cannot be changed or canceled. This depends on the trustees. ) based on the creator’s choice.

Here Are Some Commonly Asked Questions Regarding Trusts Frequently Asked Questions

Thus, a Trust deed contains specific instructions for how the assets should be distributed, how the trustee should manage them, and when beneficiaries can access them. A Trustee can also name a successor trustee who takes over management if the original trustee is unable to fulfill their duties.

Trusts and Estates Laws- What Are Estate Laws?

Estate laws govern how a person’s assets and belongings are managed and distributed after they pass away. It can consist of the following.

Will

Estate laws cover wills, which are legal documents that state who will receive a person’s property and belongings after they die.

Intestate Successions

If someone dies without a will, estate laws determine how their assets will be distributed among their relatives according to the laws of intestacy.

Probate

Trust and Estate laws govern the probate process. Probate is the legal validation of a will in court and the settling of the deceased person’s estate.

Executors

Trust and Estate laws define the role of executors or personal representatives, who are responsible for carrying out the instructions in the will and managing the estate during probate.

Beneficiaries

This is a common ground in Trusts and Estate laws. Both ensure the rights of beneficiaries. They are those named in the will or entitled to receive their inheritances.

Estate Taxes

Estate laws cover taxes that may apply to a person’s assets after death, including estate taxes that are paid based on the value of the estate.

Living Wills

Estate laws address living wills and healthcare options. Living will state a person’s healthcare wishes if they become unable to make decisions for themselves. So, you can choose the type of healthcare you want in the future. You can also make other decisions regarding your property through a living will for when you no longer remain mentally or physically capable. 

Caring For Minors Through A Will

Estate laws handle guardianship matters, appointing guardians to care for minor children or individuals with special needs who cannot care for themselves.

Resolving Property Disputes

Estate laws address disputes or challenges to wills. Estate laws of the land address fairness and proper resolution of property disputes in and outside the family.

Do You Need A Lawyer For Trusts And Estates Laws?

A trusts and estate lawyer specializes in all laws relating to trusts and estates. You can visit them for all your legal troubles related to the probate process, wills and even estates.

When Should You Get A Lawyer For Trusts And Estates Laws?

Are you facing complications with the legal aspects of your assets or a tricky family situation?

• Do you want to save money on property and asset taxes?
• Do you have specific wishes for the distribution of your assets?
• Do you have special healthcare wishes for times of incapacity?

Hire a lawyer who specializes in Trusts And Estates Laws.

They can help you out with the following:

Estate Planning

They can help you to get an estate plan according to your needs and your wishes.

Will Drafting

A trusts and estates lawyer can draft a valid will for your beneficiaries.

Trust Creation

They can create various types of trusts, such as living trusts, irrevocable trusts, and special needs trusts.

Tax Planning

A trusts and estates law specialist can develop strategies to minimize taxes and save you money.

Successful Business Planning

If you own a business, a trusts and estates law specialist can help you develop a plan for the smooth transfer of business ownership to your chosen successor.

Trusts And Estates Laws: Court Rulings

As we have discussed in the sections above, trusts and estates law in the United States is a complex and ever-evolving field. 

• Since federal laws on this subject are limited, the rulings of various courts serve as precedents and legal guides. 
• Let us check some of these cases that have shaped the legal principles of trusts, wills, probate, and estate planning. 

The Case Of Marvin V. Marvin Took Place In 1976

This is not like the traditional property estate case. However, the judgment applies to all future transactions in the US that are related to wills and estate planning. 

• This decision was delivered by the California Supreme Court.  
• The dispute was regarding implied property contracts between unmarried partners. 
• This ruling showed the path to property distribution between domestic partners, even without a formal marriage.

Reynolds v. United States

This was a landmark decision by the Supreme Court of the United States in  1879. 

• The outcomes of this case would forever change the workings of estate taxes. 
• It established the federal estate tax. 
• Today, the federal estate tax plays a very important role in US estate planning.

The Case Of Hodel V. Irving Took Place In 1987

In this case, the U.S. Supreme Court addressed trust property issues of the Native American Tribes. 

• The decision dealt with the constitutionality of the Indian Land Consolidation Act. 
• It had a considerable impact on how the act called for property distribution among the tribal communities.  

In Re Estate Of Wacker Case Of 2013 

This deals with a very interesting matter. It had its origins in the New York case. 

• The case questioned the validity of a will that was drafted in quite a non-traditional way. 
• It was done on a computer tablet. 
• It did not even contain the signature of the testator. 
• The case carefully scrutinized how technology and estate planning work in this modern age.

The Case Of Doris Duke’s Estate

Have you heard of Doris Duke? 

• She was the American billionaire tobacco heiress. 
• In the 1900s, media outlets often called her “the richest girl in the world.” 
• This case was in 2019. 
• It has origins in a court in California. 

The case garnered attention because it highlighted issues of management and distribution of wealth through trusts and wills.

The Estate Of Krasny Case Was In The Year 2009

This case questioned how valid handwritten wills are. 

• The Court ruling emphasized that one must stick to specific legal requirements when creating wills. 
• This will create uniformity in the legal documents and, thereby, ease of use.

Another Peculiar Case, The Estate Of Paul Of 2013

 Originally a Massachusetts case, it threw light on the validity of a will if created on an iPhone. 

• The court carefully considered the legality of using digital devices for estate planning.

The Case Of The Estate Of Horton, 2012

This case has its origins in a court in Illinois. 

• The plaintiffs filed the case to seek the court’s judgment on whether an individual’s gambling addiction can lead to the invalidation of their will. 
• The Court delivered this ruling on the broad subject of testamentary capacity.
• As we can see, these case laws represent only a small part of the diverse legal issues and challenges that can arise in trusts and estates law. 

Things To Remember

There are certain things that you should keep in mind before you visit a trust and estate lawyer. This will help you arrive at an informed decision.

First, Know Your Aim.

You can visit a trust and estate lawyer for various purposes. But, you should know the objectives that you want to achieve. If you see fit, you can conduct a bit of research on your own before you visit the lawyer. You can understand if a will, a trust, or other plans fit your needs the best. After going through your needs and case details, arrive at a Conclusion and convey it to your lawyer.

Next, Make A List Of Your Properties.

You can create a list containing your assets. It can include real estate properties, financial investments, business dealings, and even details of your insurance policies. Arrive at an approximate valuation of all assets and present it to your lawyer in the first consultation. 

Create A List Of Your Beneficiaries And Heirs.

Identify your family members to whom your assets could go after your death. It can include family members, not profitable organizations, friends or any other individual whom you wish to leave parts of your estate.

State Your Health Care Preferences Clearly

When we are young, we are naive. Can your 23-year-old self be thinking about what your healthcare preferences will be when you are 80? However, when you do create an estate plan, it is important to consider your health care preferences. After giving it some thought, mention it to your lawyer and ask them to make the necessary arrangements in your will.

Make A List Of Your Debts And Financial Obligations

It is important to have a list of all debts, mortgages, loans, and financial obligations. Make a will or a trust while keeping these in mind. Be sure to mention these to your lawyer to come up with a plan that best suits all your needs and obligations.

What Are Some Of The Best Trusts And Estates Law Firms?

Some good trusts and estates law firms for you, a citizen of the United States, include:

• Holland & Knight LLP,
• Katten Muchin Rosenman LLP,
• Loeb & Loeb LLP,
• McDermott Will & Emery,
• Day Pitney LLP,
• Barnes & Thornburg LLP

Hope you find the article helpful!

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