New Orleans Estate and Trust Lawyers:

A trust lawyer is an estate planning attorney who specializes in assisting trustees, settlors, beneficiaries, and heirs in obtaining and preserving their inheritance through probate, trust administration, trust disputes, and various estate planning situations.  An experienced trust attorney is needed to advise which type of trust is best suited for an individual’s needs.  As a result, a trust lawyer can help you navigate local, state, and federal regulations as well as additional legal and tax ramifications based on your assets and wishes.

During the initial appointment, a Louisiana trust lawyer will talk over your estate planning objectives in general.  The lawyer handling your trust will inquire about your family history, your net worth, and any pending or potential legal actions.  After that, the trust lawyer will put together an estate plan to minimize estate taxes, legal issues related to probate, and litigation.

What is a Trust?

A trust is a private legal relationship formed by two or more people with the intention of holding and overseeing assets for a named beneficiary.  Per La. R.S. 9:1731, a trust is the relationship resulting from the transfer of title to property to a person to be administered by him as a fiduciary for the benefit of another.  A trust is essentially an agreement created by a “grantor” or “settlor” in which another person, called the “trustee,” is designated to hold property on behalf of another person or organization, called the “beneficiary.”   Trusts can be set up for a variety of purposes, such as estate planning, asset protection, and tax savings.

A Louisiana trust lawyer creates a trust by putting the terms and conditions of the trust agreement in writing.  Usually, this document will list the trustee(s), their selection process, and their recommended management of the trust’s assets.  It will also specify each party’s obligations and rights inside the trust.  A list of all beneficiaries, or people who will gain from the trust, must be included in the trust instrument.  Depending on the parameters outlined in the trust instrument, a single trustee or a group of trustees may oversee and manage the trust once it has been established.

Wills vs. Trusts:

A trust lawyer will also discuss potential alternatives and outcomes, as well as the benefits and drawbacks of a trust versus a last will and testament.  Having no will or trust, on the other hand, leaves you vulnerable to probate and what is known as dying “intestate,” or without a will or trust.  A trust is kept private, but a will is essentially an estate plan that employs the probate procedure to divide the estate to the heirs.  The distribution of a will occurs in public.

Trusts also offer more control than wills.  With a will, the testator simply passes ownership of the assets to another for the legatees to then control as they see fit.  A trust can be used to dictate certain terms and conditions.

Types of Trusts:

There are many types of trusts.  Within each type of trust, there are many options to tailor the terms.  Some of the most common trusts are below.

Revocable Living Trusts:

A revocable living trust is subject to grantor modification or revocation at any moment.  The grantor creates it during their lifetime and often names themselves as the initial trustee so that the grantor maintains control of the assets.  A successor trustee is named to take over administration of the trust after death, and beneficiaries are named to receive the trust assets upon death.  Revocable living trusts are useful for probate avoidance which as cost and privacy benefits.

Irrevocable Living Trusts:

An irrevocable living trust is similar but cannot be modified or revoked once it has been created.  Irrevocable trusts are typically used to protect assets from creditors and lawsuits, to avoid estate taxes, or for Medicaid planning.  Another big difference is that to fully enjoy the asset protection and tax avoidance benefits of an irrevocable trust, the grantor must name a separate trustee from the outset, thereby giving up direct control of the assets in the trust.

Testamentary Trusts:

A testamentary trust is created within a last will, thus, its terms do not become effective until after the grantor’s death.  A testamentary trust is therefore always revocable.  Testamentary trusts don’t become effective until after the will goes through probate.  Testamentary trusts are often funded with life insurance and retirement funds.  They are often used for the benefit of minor children who are not yet able to manage assets, especially when the other parent is untrustworthy or no longer present.

Special Needs Trusts:

A special needs trust is a specific type of testamentary trust set up to provide financial support for a disabled heir without jeopardizing their eligibility for certain government benefits such as Medicaid or SSI.  A special needs trust can also be created by someone who is receiving government benefits and who suddenly inherits or expects to receive a settlement that would cause them to lose their benefits.

Spendthrift Trusts:

A spendthrift trust is another type of testamentary trust designed to keep beneficiaries from having direct access to their inheritance.  They are used to protect trust assets from creditors of the beneficiary, to provide for the maintenance and education of minor beneficiaries, and to protect irresponsible heirs from themselves.

Charitable Trusts:

A charitable trust is created to benefit a charitable organization and provides tax benefits for the grantor while allowing the organization to use the funds indefinitely.

Advantages of Creating a Trust:

A trust offers many benefits.  Probate avoidance can save costs, provide privacy, and speed up the transfer of assets.  Trusts can offer tax advantages, particularly for avoiding estate taxes, allowing for the tax deferred growth of assets, and minimizing capital gains.  Family values such as education, home ownership, and charity can be encouraged through a trust.  Trusts can protect assets from creditors, lawsuits, and divorce.  Trusts can help you provide for minor or special needs dependents after death.  Trusts can help you protect irresponsible family members from squandering their inheritance.  The sky is the limit when it comes to customizing a trust to maximize its benefits.

Louisiana Trust Lawyers:

We are a Gretna law firm that has served the New Orleans area since 1980.  Our experienced estate planning lawyers are well versed at creating all types of Louisiana trusts.  We can analyze your circumstances to determine whether a trust is right for you and your family and which type of trust best fits your needs.  We take pride in offering a personal and trusted experience.  Call us today for a free consultation and find out why so many of our clients come back to us.