The terms will and trust are sometimes used interchangeably. While there are some similarities between the two, both services go through different processes. A will is a legal document that dictates who receives your possessions, including your property, after you pass away. A trust refers to a legal arrangement where one individual, known as a trustee, holds onto a property title for another person, known as the beneficiary. There are traditionally two types of beneficiaries. The first beneficiary receives income from the trust until they pass away. After this, the remaining value goes to the secondary beneficiary.
A will only covers whatever property is in your name after you pass away. A trust only includes whatever property you included before passing away. One of the biggest differences between wills and trusts is a will goes through the probate court. The court ensures the will is valid and makes sure all the items are properly distributed to the correct parties. Because of this, wills are also public record.
Will and Trust Attorneys
While wills and trusts are separate documents, both are typically handled by a single lawyer, sometimes referred to as an estate attorney. Estate lawyers have multiple responsibilities. The first is explaining the key differences between wills and trusts, helping clients choose whether one or both is appropriate based on their assets.
Estate lawyers are knowledgeable about all the taxes and fees imposed on your property after you pass away. A good attorney helps you limit how much you or your family members spend on these fees, ensuring your loved ones get the best possible deal after you pass away. If you hire an attorney to draft your will, he or she ensures everything is correctly listed in the document. This is important because your will must go through the probate court after you pass away. If there are any errors, it slows down the inheritance process. In some cases, it may take months to resolve these issues.
In most cases, estate attorneys do not write up the will, though you can ask for assistance if you feel you are unable to properly compile your own will. Legally, you are not required to hire an estate lawyer when you make a will, but it is much easier for a lawyer to represent your will in probate court if he or she at least has an opportunity to look over the document and clarify any potential issues.
Setting up a Trust
Writing your will is fairly straightforward, but establishing a trust is much more complex. Because of the complexity, some clients end up selecting their estate attorney as the trustee. The larger your estate, the more important it is to hire an attorney. Your attorney works directly with you to draft a plan, based on the value of your property as well as the financial needs of whoever you are leaving the property to.
Working with an attorney ensures all your assets are protected. If you are leaving the trust in the hands of a third party, you want your plan to be as accurate as possible. It is also important you outline the duties of the trustee and the specific periods where your beneficiaries receive payments from the trust funds. An attorney also helps you create detailed records, which may be necessary if there are ever any legal disputes regarding your trust.
An estate attorney also helps you decide whether a trust is necessary in the first place. While almost everyone has a will, trusts are not nearly as common. An estate attorney goes over all your financial information to determine whether a trust is necessary in the first place, or if you are better off leaving everything behind in your will.
Hiring a Will and Trust Attorney
Estate attorneys use several different pricing methods for their services. Some attorneys charge an hourly rate, which ranges between $150 and $200 per hour. Hourly services are more common when setting up a trust, since it involves more planning as well as meeting with potential trustees.
If you are only getting assistance with a will, you are more likely charged a flat fee. The fee greatly varies based on location and the overall complexity of your will. On average, you can expect to pay around $500. If your will is particularly complex, you may pay closer to $1,000. Flat fees for trusts are normally higher, averaging around $1,200 to $1,500.
The last option is paying a percentage based on the value of your estate. This is considered the rarest form of payment and typically only applies to large, complex trust cases. Paying a percentage of your estate is normally the least ideal way to pay for an attorney, so whenever possible, prioritize flat or hourly rates.
Finding a Will or Trust Attorney
If you work with a financial advisor, such as an accountant, ask if he or she has a recommended law firm to handle wills or trusts. If you do not have a financial advisor, there are several other methods to find estate attorneys in your area. Every state has a bar association, which allows you to search online for accredited lawyers in your city or county. If you are in a smaller area where fewer lawyers are available, consider asking your local probate court for recommendations.