If you are smart enough to try to put some of your assets into a trust (inter vivos) while you are still alive, you have been paying attention to the important differences between wills and trusts. A trust that you set up during your life is much more secure than a will when it comes to challenges to how your assets are to be split up during estate planning. Creating a trust is a brave thing to do because it gives away some of your plans for your assets while you are still alive. This makes it safe from attacks on your mental capacity, since it's unlikely, for example, that one of your relatives will say to your face that you're crazy or weak and being influenced too much by another relative. In some cases, this makes a trust a much safer bet than a will.
But the trust may also make a person feel bad about leaving out a family member, and that person will know about those feelings while they are still alive. With a will, you will never know if people don't like it or not. People who don't like what the person who made the will did are long gone by the time people who do like what they did try to defend it. But it should be said that smart writing should be able to get rid of the need for either a defence or a contest. This is why you need a smart estate planning lawyer, not just a form, to make your will. When your lawyer makes your will, they often defend its contents, or what they think your wishes are. The trust is a different story because your trust will be managed by someone (called the trustee) for the benefit of those who the trust helps (the beneficiaries).
One of the most important parts of setting up a trust is deciding what the trustee can and cannot do with the assets you have put in trust. Remember that a trustee is already expected to do what is best for the trust, and that many states have laws about what a trustee can and cannot do if the settlor (the person who created the trust) doesn't say otherwise. But again, you don't want the state to decide what happens to your trust's money or who gets your assets. Your wills and trusts lawyer will be able to give you a list of a trustee's traditional powers in your state and explain what each one means. A lot of the powers have to do with what kinds of assets the trustee can buy on behalf of the trust. For instance, sometimes the trustee isn't allowed to buy general securities for the trust because they are seen as too risky. But if you have chosen your trusted stock broker as your trustee and she has agreed, this might be exactly the kind of restriction you don't want. Talk to your lawyer about the type of trust you want to set up and the rules in your state. Don't forget that these rules are there just in case you don't make your own. Knowing what the rules are and why they are there will help you decide which ones you like and which ones you would rather not have. You can also give the trustee more or less freedom than what the state rules allow, depending on how conservatively you want your assets to be managed.
Be ready to have an honest conversation with your lawyer about what the rules are and what you want to happen. It's important to remember that your lawyer who helps you plan your estate has seen many trusts and knows how they work. Sometimes, rules that seem good right now could make it hard for you to trust someone in a very different economic situation. In some situations, a trust can last for many years, and the trustee may change along with the times. When big changes have happened in the economy, a trust with more flexibility will be helpful. So, as you enter the exciting world of forming a trust, you have a lot to think about. Don't be put off by rules. They are there to help you, and when you understand them, you will know what you need better. Ask your estate planner to explain the current rules and give you some general tips on how to choose a trustee.
