Trust law matters for many important reasons. The creation of trusts can serve many valuable functions for incapacity planning, asset protection, and legacy planning. In order to take advantage of trusts, which are powerful legal tools, you need to make sure you understand trust law.
Parman & Easterday can assist you in learning about trust law in the state where you live. We represent clients in Oklahoma and Kansas and we know the trust laws for all three states.
We can help you to determine if trust creation is the right choice for you and we can provide guidance on the types of trusts to create and the trust creation process.
Why Does Trust Law Matter?
Trust law matters because you need to understand what trusts do and the purposes they serve. Trusts create a legal relationship in which ownership and possession are divided. The trust owns property, which is managed by a trustee for a beneficiary. The person who creates the trust is called the trust creator, and the legal document used to create the trust establishes the type of trust, the nature of the relationships, and the instructions which the trustee must follow.
There are different kinds of trusts that serve many important purposes. Knowing trust law will help you determine if a trust, and what type of trust, is right for you. For example, there are:
- Special needs trusts, which make it possible for you to give a gift to someone who is disabled. The gift is managed for the benefit of the person with the disability by a trustee, and the assets within the trust will not disqualify the person with the disability from receiving means-tested benefits like Medicaid.
- Spendthrift trusts, which make it possible to give a gift to an heir who isn’t very good with money and make sure the money is not lost because of irresponsible spending.
These are just two of many different examples of trusts that serve distinct purposes. There are many different kinds of trusts, and understanding trust law will help you to determine if there is a trust out there which meets your particular need.
Knowing Trust Law Helps You Understand What Kind of Trust to Create
Because there are so many different kinds of trusts available, you need to know trust law so you can decide which one to create.
For example, there are living trusts, which are also called revocable trusts. These are useful for incapacity planning and probate avoidance. You serve as the primary trustee and name a backup trustee who takes over management of assets in case of your incapacity . Upon your death, this successor trustee can transfer the trust assets through the faster and easier trust administration procedures, rather than transferring them through a probate.
There are irrevocable trusts, which cannot be changed as can revocable trusts. These serve different purposes, like allowing you to shield assets from creditors, making sure assets don’t count as resources if you are trying to qualify for Medicaid or VA benefits to pay for your assisted living facility or nursing home, and sometimes helps you reduce your estate tax burden.
Trust law helps you understand the differences between these various types of trusts so you can select the right trust to meet your needs.
Knowing Trust Law Helps with Trust Creation
There are formal legal requirements that must be followed to ensure a trust is created properly and is legally valid. Knowing trust law makes it possible for you to follow these requirements and establish a trust that offers the expected protection. If these protocols aren’t followed in the creation of the trust document, then the trust may not provide the benefits you expected.
Because trust law differs from state to state, it can be complicated to find out exactly what you need to do, so it is always a good idea to seek legal help with the trust creation process.
Getting Help from a Trust Law Attorney
If you need to learn about trust law, Parman & Easterday can help you. Our legal team understands everything you need to know about trust creation in Kansas or Oklahoma. To find out more, join us for a free seminar. You can also give us a call today at (405) 843-6100 or (913) 385-9400 or contact us online to speak with a member of our legal team to receive personalized advice.