Trust Attorney in Orange Beach, AL
In general, people establish a trust to avoid probate, to provide specific intent to the disbursement of their estate, to maintain the privacy of their estate, for financial purposes and/or to protect their family members. Many different types of trusts exist that can accommodate the different reasons people have. And no trusts are not just for the wealthy as is stated so often.
A Trust is Only for the Wealthy. Not!
A trust is a means to pass assets as intended while avoiding the legal process of probating the will in court which is public record, timely, and potentially, costly. The trustor, also referred to as the settlor or trust maker, is the owner of the property and transfers it to the trustee. The trustee is the one who manages the property for the benefit of someone else, known as the beneficiary. The beneficiary is a person or entity whom the trust was established.
When creating a living trust, known as an inter-vivos revocable trust, most trustors are the trustee. The trustee is you, thus unless titled otherwise, all assets remain yours just as before creating the trust.
Trusts can have multiple trustors, trustees, and beneficiaries. Typically, a different person or entity serves each of these unique roles. Sometimes, though, the trustor can act as both the trustor and trustee. Likewise, in limited situations, the trustee can act as both the trustee and the beneficiary.
A trust can keep your assets private even when you die because a trust does not need to go through probate which is a matter of public record.
Also, a trust can protect assets from creditors or help beneficiaries who cannot manage money well when the trust is established as an irrevocable trust or becomes irrevocable which happens upon the death of the trustee. For those individuals with high net worth a trust as part of an estate plan can be used to minimize estate taxes.
Whatever your need is for a trust, Chris Bales, our estate planning lawyer, can help make sure your trust is drafted in a way that benefits you and the intended beneficiaries.
Types of Trusts in Alabama
Specific types of trusts that people can use to protect their assets or pass their property on to someone else come in many forms. However, all of these trusts are either revocable or irrevocable.
Revocable trusts, also known as inter-vivos living trusts, allow the trustor to continue to alter the property in the trust. They can even revoke the trust entirely. This gives the trustor far more control over their property. With that control, because the trustor still has access to the property in the trust they created, creditors can often reach into the trust to satisfy debts owed to them.
Irrevocable trusts, on the other hand, cannot be changed or revoked once the trustor creates one. The trustor relinquishes control over the assets in the trust. Creditors cannot touch those assets once they are removed from your estate. Often, the trustor gains in terms of tax and probate avoidance.
Examples of Different Types of Trusts
Just to give you an idea of what types of trusts there are to address your specific needs, here’s a list of some of the most common:
- Asset protection trust
- Charitable trust
- Constructive trust
- Special needs trust
- Spendthrift trust
- Tax by-pass trust
- Totten trust
You can also create a trust specifically for your property, pets and even your gun collection. Specialized trusts are dependent on the purpose of trust and need special considerations and consultation by a trust attorney.
Benefits of a Trust in Alabama
As mentioned, trusts are beneficial to avoid probate, the ease of transferring assets, and sometimes taxes. By using a trust (in addition to a pour-over will), assets of a trust pass directly to the trust’s beneficiary when the trustor dies. This process means the assets do not go into the trustor’s estate – they are transferred inter vivos, or between living people. As a result, certain estate taxes do not apply to trusts. Using a trust to pass property to your heirs can have tax advantages and can avoid the potential legal complications of dividing your estate or a contested will.
A trust also gives you the ability to create instructions and conditions for asset distribution upon your death–giving you control over your assets even when you are not here. So, if you have a beneficiary whom you want to finish college before disbursement of funds or if you want only a certain amount of funds disbursed at different times in the beneficiary’s life, you get to decide those things. Further, you can identify a successor trustee––someone you know who can manage the trust according to the terms and conditions.
Contact Chris Bales, a Trust Attorney in Alabama serving Orange Beach, Gulf Shores, Foley, and all of Baldwin County Today
Whether you have some or a lot of assets, a trust may be just the thing you need to manage those assets and to decide what’s done with them upon your death. Our trust lawyer in Orange Beach, Gulf Shores, Foley, and Baldwin County will consider what you want the trust to do for you, review the assets you want to transfer to the trust, and guide you through the entire process, providing solid legal advice as you need it or the situation demands it.
To learn more about trusts and how a specific one can benefit you, contact The Bales Law Firm either online or at 251-213-9343 to schedule a consultation.