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Essential Questions to Ask Your Attorney Before Creating a Trust

Essential Questions to Ask Your Attorney Before Creating a Trust

Wondering if a trust fits your plans for passing property and protecting loved ones? A trust is a legal arrangement that places assets under the care of a trustee, with directions for how and when those assets move to chosen beneficiaries. It can streamline transfers, protect privacy, and, in some situations, reduce taxes.

At Commonwealth Life and Legacy Counsel, attorneys Michael and Lelia Winget-Hernandez guide Central Virginia families. We wrote this article to give you the most helpful questions to raise before you sign any trust documents.

1. Do I Need A Trust?

Before drafting papers, your lawyer should sit down with you and review goals, property, and family dynamics. During that first chat, ask how the firm decides whether a trust fits your aims or if a simpler will, transfer-on-death deed, or joint ownership would work just as well. A good answer shows how the trust attorney weighs real estate, business interests, blended families, and long-term care plans rather than pushing one tool for every client.

If the lawyer points out that a trust will not fix every problem, that is a plus. Hear them explain other paths, such as gifting, beneficiary designations, or even transferring a home with a life estate. Knowing the full menu lets you pick the right approach with confidence.

2. What Type of Trust is Right for My Situation?

Trusts come in several forms, each solving a different puzzle. Ask your attorney to explain how a revocable living trust, irrevocable trust, special needs trust, or AB trust works and why one stands out for your case.

For example, an AB trust, sometimes called a bypass trust, can help a married couple use both federal estate tax exemptions, lowering potential taxes when the second spouse dies. On the other hand, an irrevocable Medicaid asset protection trust might shelter property from long-term care costs, but it limits your control.

  • Clarify whether you keep the right to change or undo the trust during life.
  • Find out if the chosen structure guards assets from creditors or nursing-home spend down.
  • Ask about the income and gift-tax results of each option.

A brief side-by-side chart or flyer from the lawyer can be helpful for later review.

3. What Assets can be included in the Trust?

Most property can move into a trust, yet some asset classes require extra steps. Homes, bank accounts, brokerage portfolios, and personal items are usually easy to retitle. Retirement accounts such as IRAs normally stay outside and list the trust or a person as beneficiary instead, to avoid taxable distributions.

Because a trust only controls what it owns, funding is vital. Ask your attorney to outline the deeds, assignment forms, or new account paperwork you will need and to confirm who handles each step. Make sure you understand which items should stay in your name, such as vehicles, for insurance reasons.

4. Who Should I Choose as Trustee?

The trustee takes legal title to the property, manages it, and follows written instructions. If you wish to remain in charge, you can serve as initial trustee and name a successor for incapacity or death. When choosing another person or a corporate fiduciary, weigh honesty, time availability, and money skills.

Create a short list of candidates and discuss with the lawyer how to set up checks and balances. For instance, co-trustees provide oversight while a trust protector clause allows one party to remove a trustee who is not performing well.

  1. Ask what records the trustee must keep.
  2. Confirm how often the trustee reports to beneficiaries.
  3. Review compensation rules so everyone knows expectations.

A thoughtful trustee choice can prevent family tension later.

5. What are the Benefits of a Trust?

Your attorney should explain concrete advantages, not just buzzwords. Listen for three main points.

  • Avoiding Probate: In Virginia, probate can take months and expose records to the public. A fully funded living trust passes property directly to beneficiaries without court involvement, saving time and filing costs.
  • Control and Flexibility: You can stagger distributions, require that funds be used for education, or hold money in a trust until a child reaches a certain age. Such detailed instructions are harder to enforce through a simple will.
  • Privacy: Because trust documents are not filed with the circuit court clerk, neighbors and curious relatives cannot browse your plan as easily.

6. What are the Potential Drawbacks of a Trust?

No tool is perfect, and an honest attorney should cover the downsides.

Issue Why It Matters Ways to Address It
Upfront Cost Legal drafting and deeds often cost more than a will package. Compare long-term probate savings against the initial fee.
Administrative Work Titling assets and ongoing record-keeping take effort. Create a funding checklist and set calendar reminders.
Missed Assets Items not retitled fall back to probate. Use a pour-over will and review ownership each year.

By understanding these points upfront, you will not be caught off guard after signing.

7. Will a Trust Help Manage Estate Taxes?

Federal estate tax is charged only on very large estates, yet married couples with growing property or life insurance can still benefit from planning. Revocable trusts alone do not reduce taxes, but an AB trust or qualified personal residence trust can create savings. Ask your attorney to run a projection using current exemption amounts and explain any Virginia tax exposure.

If your net worth is climbing, find out whether gifting strategies or life insurance owned by an irrevocable life insurance trust could further cut future tax bills.

8. Do I Still Need a Will and Power of Attorney?

Yes. A pour-over will act as a safety net, directing anything left outside the trust into it after death. Without that backup, stray accounts could fall to the state’s default inheritance rules.

In addition, a durable financial power of attorney lets an agent handle taxes, retirement plans, or lawsuits that sit outside the trust during incapacity. A health care directive covers medical choices, which no trust can cover. Confirm that your attorney includes these supporting documents in the plan and updates them to match the trust terms.

9. How Can I Ensure the Trust Stays Up-to-Date?

Life never stands still, so request a review schedule. Weddings, new grandchildren, or a house purchase could change your wishes. Laws also shift. The attorney might offer annual check-ins, fixed-fee reviews every three years, or a membership plan that alerts you about statutory updates.

Ask whether the firm provides a binder or secure portal where you can store updated deeds, account statements, and successor contact details. Quick access keeps the plan ready when your family needs it.

10. What Happens if There Are Disputes Regarding the Trust?

Even a well-written trust can face beneficiary disagreements or claims of undue influence. Learn the lawyer’s approach to conflict. Do they try early mediation? Can they represent the trustee in court if a suit is filed? Knowing their strategy protects you and the people you leave in charge.

Also discuss clauses that help prevent fights, such as “no-contest” language, detailed accountings, and requiring beneficiaries to accept alternative dispute resolution before filing a petition.

Ready to Talk About Estate Planning? Contact Us

At Commonwealth Life and Legacy Counsel, we offer practical, compassionate guidance for families across Charlottesville, Fluvanna, Louisa, and nearby areas. Whether you’re planning a will, setting up a trust, or preparing for long-term care, we’re here to help. Call us in Central Virginia at 434-589-2958 or in Powhatan at 804-598-1348, email info@winget-hernandez.com, or visit our Contact Us page to get started. Let’s create a plan that protects what matters most and gives your family lasting peace of mind.