Before you partner with a law firm, here is a list of some need-to-know questions to ask a trust attorney. A firm or attorney specializing in living trusts and estate plans can be a valuable partner nowadays. Surveys show that Americans are investing less and less time into thinking about and preparing for the future, especially regarding end-of-life care and bequeathment.
But soaring healthcare costs, the largest generational wealth transfer in history, and a global pandemic highlight the importance of being prepared, now more than ever. If you plan to work with a professional experienced in living trusts and other estate planning tools for the first time, then knowing what questions to ask a trust attorney (and why) can help you navigate the water and know what to expect.
A Primer on Estate Planning & Living Trusts
An estate plan is a comprehensive suite of tools and documents designed to lay out the legal transfer of wealth and responsibility from one person to their heirs and surviving loved ones, as well as set up contingencies for their own end-of-life care, financial considerations before death (during incapacity), and even more complex matters such as estate taxes.
Without an estate plan, a person’s death will lead to their assets’ distribution as per their state’s intestate rules, dictated by their probate code. A court will oversee the process, and there are very few options to challenge this posthumously. With an estate plan, a person has much greater control over what, when, and how their belongings are transferred.
This is why it’s essential to know what questions to ask a trust attorney. Living trusts provide a much greater degree of flexibility when it comes to transferring assets and wealth. Unlike wills, they go into effect immediately rather than upon death, providing for other opportunities such as potential asset protection and positive tax implications.
A law firm or attorney specializing in living trusts can ideally help clients by developing an estate plan that allows for a more comprehensive and flexible approach, giving them the ability to choose how and when to distribute assets after death and set conditions to minimize their tax impact and maximize benefits for their loved ones.
Questions to Ask a Trust Attorney
These questions to ask a trust attorney can help you learn more about the professional or practice you are planning on working with and learn more about the estate planning process itself.
How many years of estate planning experience do you have?
A good measure of any given law firm is how reputable it is now and how long it has managed to stay reputable. Law firms with decades of experience in a specific field and a strong local reputation will often be a good pick. The same goes for individual professionals with a new practice but years under the belt. Be sure to ask a professional about their experiences with setbacks in the process, such as having faced challenges and audits from irate family members or the IRS, and more. Someone who has overcome these issues will better know how to face them in the future.
Does your firm focus on estate planning?
Some firms and professionals offer estate planning services as part of a collection of other legal services rather than specialization. If you want a comprehensive and well-crafted estate plan that includes a living trust, seeking out a law firm that focuses on living trusts and specialized estate plans is a good idea. Estate planning can be notoriously complex, and considerations around how to best structure an estate plan can change frequently. Work with a specialist to avoid any unneeded complications.
Who drafts and executes the plan?
Some lawyers segment the work of drafting and executing trusts and other estate planning documents. The reason this might matter specifically for living trusts is that proper execution is a vitally important part of the process of utilizing a living trust. Trusts only work if the assets and properties associated with them are properly funded into them, which can require quite a bit of legwork and are typically part of the trust’s execution.
What do you do for follow-ups?
Estate planning is very rarely, if ever, a one-and-done process. Estate plans need to be reviewed, renewed, and rewritten multiple times over the course of a person’s life, as often as once every two years. Tax law changes, losses in the family, weddings, divorce, and other events may force a more immediate change. A change in finances may require that you liquidate an asset you had planned to bequeath, or you might need to amend a plan to incorporate a new property.
Do you have tax specialists?
For larger estates, tax considerations remain at the heart of what makes an estate plan important. Simple oversights and mistakes can lead to a hefty tax bill on your property and assets after your death, or it may result in an inheritance your beneficiaries cannot afford because of taxes. Be sure to choose an estate planning professional experienced with managing estate plans in a tax-conscious way.
What other estate planning issues do you address?
Wills and trusts aren’t the ends all be all of the estate planning processes. There are other documents and contingencies to consider, such as a power of attorney documents to manage healthcare and financial decisions before death (in cases of incapacity), as well as living wills to help formulate and provide clear instructions for end-of-life scenarios and terminal illness.
How do you communicate changes and keep me informed?
Creating an estate plan is a very involved process. These questions to ask a trust attorney is an equally involved process. Professionals who promise to keep their clients in the loop and advise them on their best course of action – rather than wholly taking the reins – should always be a preferred choice. Meticulousness and documentation should be a part of that process – make sure your would-be partner is keen on contacting you to review and rework all documents and avoid any potential miscommunication.
Questions to Ask Yourself
Creating a comprehensive estate plan to match your needs and requirements is a lengthy and in-depth process. To that end, you might want to ask yourself a few questions as well.
- Were you comfortable with the meeting and your potential estate planning professional?
- Were they clear, and did they communicate effectively?
- Do you feel a sense of rapport with this professional?
It would be best if you worked with someone you like, not only on a professional basis but also on a more congenial basis. Some further questions to ask a trust attorney:
- Is this person someone who reflects your values and morals?
- Do they communicate well?
- Are they easy to work with?
These questions are just as important as their qualifications and experience.