What’s the difference between a probate lawyer, a trust attorney, and an estate planner?

Estate Planner vs. Probate Lawyer

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Attorney and lawyer mean the same thing. A lawyer is someone who holds a license to practice law. Probate law and estate planning are, however, different areas of practice.

What is a Probate Lawyer?

Probate Lawyers handle matters related to the Probate Court after someone has died and estate planning was not done or has created problems. They participate in the following:

  • □ Estate Administration and Intestate Succession: Managing assets, debts, taxes, and distributing assets that are under the jurisdiction of the probate court. This includes:
    • □ Collecting and managing estate assets
    • □ Paying debts and taxes
    • □ Distributing assets according to state laws when there is no will
  • □ Will and Trust Validation: Ensuring that wills and trusts meet legal requirements and accurately reflect the deceased’s intentions, presenting them to the court for validation.
  • □ Guardianship and Conservatorship: Establishing and managing guardianship or conservatorship arrangements for minors and incapacitated individuals, ensuring their well-being and financial management.
  • □ Dispute Resolution and Litigation: Handling legal issues such as arguments over wills, trusts, claims against estates, and disagreements between beneficiaries or heirs.
  • □ Compliance and Reporting: Preparing and submitting financial reports to meet court orders and legal requirements.

What is an Estate Planner?

Sometimes people refer to estate planning attorneys as trust attorneys, even if setting up trusts is only a part of what estate planning attorneys do.

Estate Planning Attorneys aim to keep you and your family out of Probate Court. They focus on:

  • □ Creating Wills and Trusts: Drafting estate planning documents that outline how a person’s assets should be managed and distributed after their death. This can help avoid the need for probate court by specifying clear instructions.
  • □ Setting Up Living Trusts: Establishing trusts that allow individuals to manage their assets during their lifetime and pass them on to beneficiaries without going through probate. These are also known as revocable living trusts.
  • □ Powers of Attorney and Healthcare Directives: Drafting documents that appoint someone to make financial or healthcare decisions on your behalf if you become incapacitated.
  • □ Tax Planning: Advising on strategies to minimize estate and gift taxes, ensuring that more of your assets go to your beneficiaries rather than to taxes.
  • □ Asset Protection: Implementing legal strategies to protect assets from creditors and lawsuits, ensuring they are preserved for your beneficiaries.

Many attorneys practice both probate law and estate planning. Estate planning can be complicated because it involves changing tax law. At Wealth Care Lawyer, we focus on Estate Planning.

A Peek at the Estate Planners Trust Toolbox

  • Living Trusts: A trust created during an individual’s lifetime to manage and distribute their assets while avoiding probate.
  • Testamentary Trusts: A trust established through a will that takes effect upon the testator’s death.
  • Bypass Trusts (Credit Shelter Trusts): A trust designed to allow one spouse to leave assets to the other while minimizing estate taxes.
  • Disclaimer Trusts: A trust allowing a beneficiary to refuse a portion of the inheritance, redirecting it to another beneficiary, often to save on taxes.
  • □ Clayton Election Trusts: A flexible estate planning tool that allows the surviving spouse to make post-mortem decisions about how assets will be allocated between different types of trusts.
  • □ Using Trusts for the Marital Deduction: Trusts such as Estate Trusts, Power of Appointment Trusts, QTIP, and QDOT Trusts are used to defer estate taxes on assets passed to a surviving spouse.
  • Trust Planning for Children and Grandchildren: Trusts like Section 2503(c) Trusts and Crummey Trusts designed to provide for minors and take advantage of tax benefits.
  • Life Insurance Trusts (ILITs): A trust created to own life insurance policies, removing them from the estate to avoid estate taxes.
  • Charitable Trusts:
    • □ Charitable Remainder Annuity Trusts (CRAT): A trust that provides a fixed annuity to the donor or other beneficiaries, with the remainder going to charity.
    • Charitable Remainder Unitrusts (CRUT, NICRUT, NIMCRUT): Trusts that pay a percentage of the trust’s value to the donor or other beneficiaries, with the remainder going to charity. CRUT Calculator.
    • □ Charitable Lead Annuity Trusts (CLAT): A trust that pays a fixed annuity to a charity for a set term, with the remainder going to non-charitable beneficiaries.
    • □ Charitable Lead Unitrusts (CLUT): A trust that pays a percentage of the trust’s value to a charity for a set term, with the remainder going to non-charitable beneficiaries.
  • Grantor Retained Interest Trusts:
    • □ Grantor Retained Annuity Trusts (GRAT): A trust in which the grantor retains the right to receive a fixed annuity for a specified term, with the remainder passing to beneficiaries.
    • □ Grantor Retained Unitrust (GRUT): Similar to a GRAT, but the retained interest is a percentage of the trust’s assets, recalculated annually.
    • □ Grantor Retained Interest Trust (GRIT): A trust in which the grantor retains an interest in the trust assets for a specified term, commonly used for non-family beneficiaries.
  • □ Qualified Personal Residence Trust (QPRT): A trust that allows the grantor to transfer a personal residence out of their estate while retaining the right to live in it for a set term.
  • Intentionally Defective Grantor Trusts (IDGTs): A trust designed to be ignored for income tax purposes but effective for estate tax purposes, allowing for tax-efficient transfers to beneficiaries.
  • □ Beneficiary Controlled Trusts: A trust that allows the beneficiary to have control over trust distributions while keeping the assets protected from creditors.
  • Dynasty Trusts: A trust designed to last for multiple generations, providing for descendants while minimizing estate taxes.
  • □ Spousal Lifetime Access Trusts (SLATs): A trust created by one spouse for the benefit of the other, providing asset protection and potential tax benefits.
  • □ Domestic Asset Protection Trusts (DAPTs): A trust that provides asset protection benefits while allowing the grantor to be a potential beneficiary.
  • □ Incomplete Non-Grantor Trusts (INGs): A trust that can offer state income tax benefits while the grantor retains some control over the assets.
  • □ Qualified Subchapter S Trust (QSST): A trust that can hold S corporation stock and meet the IRS requirements to preserve the corporation’s S election.
  • □ Electing Small Business Trust (ESBT): A trust that can hold S corporation stock and is taxed at the highest individual tax rate on its S corporation income.
  • Special Needs Trusts: A trust designed to provide for a disabled beneficiary without affecting their eligibility for government benefits.
  • □ Directed Trusts: A trust where the trustee’s actions are directed by an advisor or committee, allowing for specialized management.
  • □ Silent Trusts: A trust where the beneficiaries are not informed of its existence or details until a specified time or event.

As you can see, estate planning is quite a wide field, and here we have only touched on the trusts in our toolbox. The wrong trust can hurt you, and sorting it all out is the job of a qualified estate planner.

Trusts – A general overview

Avoiding Probate in California – In trusts we trust?

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