New Mexico Setting Up a Trust Lawyer

Creating a trust can be an exciting time for you and your eventual heirs. These special legal entities have some extraordinary capabilities, enabling you and your family to not only plan ahead but also take advantage of some key potential benefits.

Working with a New Mexico lawyer when setting up a trust is the recommended course of action in any scenario.

An attorney will help you select the ideal trust instrument in light of your goals, draft appropriate rules for the trust, ensure that the transfer of assets into the trust is successful, and provide support for you and the trust throughout the entire process. They can also help you select a reliable trustee (or series of trustees) and ensure that the trust can be self-sufficient to last for the intended term.

When you are ready to start, contact New Mexico Financial & Family Law. Our experienced lawyers can help you set up a New Mexico trust and create a bright future you can look forward to.

Call 505-503-1637 or contact us online to schedule a no-obligation consultation to discuss setting up a trust with a highly-rated New Mexico law firm.

Benefits of Working With a New Mexico Setting Up a Trust Attorney

When dealing with any decision that can permanently affect your entire family’s financial future and well-being, it is advisable to consult with an experienced New Mexico attorney.

Working with a reputable lawyer is especially important when creating a trust. Trusts offer many conveniences and benefits, but they are also quite complicated.

Since they act as a unique legal entity, a trust’s management can fall outside the control of the trust creator after it has been created. It may also not operate as intended and fail to produce the expected benefits unless proper care and consideration are taken.

New Mexico Financial & Family Law starts every client engagement with a thorough review of your current estate plans, the assets you intend to place into a trust, and your specific goals for trust creation. We can then provide a set of recommendations tailored to help you and your family accomplish your top financial priorities.

Your New Mexico attorney will be there to guide you, offer support, and closely review any legal language during every step of setting up a trust.

A lawyer from New Mexico Financial & Family Law can provide invaluable assistance with all of the major tasks and decisions involved in setting up a trust.

Help You Choose the Optimal Type of Trust to Set Up

There are many different types of trusts. Each has its own rules and functions.

Some trusts operate totally differently than others, especially when the trust is irrevocable and has special rules.

Your New Mexico setting up a trust lawyer will review all of the relevant options, informing you of the advantages and possible drawbacks of each. They will offer recommendations based on your specific situation, including your portfolio, your goals for the trust, and the outcomes you want to see.

Choosing the right type of trust is critical because they are often difficult to change or dissolve, even when they are technically revocable. Working with an experienced lawyer reduces the risk that you will need to make major changes to a trust or end up with unnecessary expenses in the trust creation process.

Set Rules for the Trust

Every trust has its own unique set of rules. These rules can govern the way the trust is managed, such as controlling how assets can be used to generate investment income.

Rules can also be set to control the way assets or income are distributed from a trust. A common example is that a trust may only pay out a distribution to an individual once they reach the age of majority.

The trust may also only distribute assets to an individual when they graduate college, get married, or have a child. Some trusts are arranged to provide financial assistance to individuals exclusively for education costs, medical expenses, or purchasing a home.

There are nearly limitless options available when setting up rules for a trust. Your New Mexico trust attorney can help you consider all of your options and create guidelines for your trustee to follow so that your trust is capable of operating exactly in the way you intended.

Determine How the Trust Will Be Supported and Managed

Trusts have administration costs, and they must be properly structured if they are expected to be self-sustaining.

Many trusts are set up in a way that they can continue to build value. By including appreciable assets, like stocks, bonds, and real property, the trust can generate interest that can continue to grow over time.

Some trusts also pay out a regular income or annuity using these proceeds.

In any case, the last thing you will want to happen is for the trust to run out of money because it was not properly managed or because there weren’t enough funds placed within it to make it sustainable.

Your New Mexico lawyer will help you predict the administrative costs of setting up the trust and maintaining it throughout its intended term. They can also help you make key decisions to minimize the long-term costs of supporting the trust while maximizing its potential gains in value.

Help You Select a Trustee (and Backup Trustees)

Selecting a trustee is possibly the most important decision you will make when setting up a trust with the help of a New Mexico attorney. Your trustee must be someone you can, well, trust — completely and unwaveringly.

Many times, trust creators decide to designate a bank, financial advisor, or attorney as a trustee. Naming an institution instead of an individual can ensure that the trust lasts for the intended term, as a person could potentially pass on before their trust management duties have concluded.

New Mexico Financial & Family Law can help you determine a succession of trustees who you can name to act as reliable stewards. We can build in language to allow for sound decisions to be made when naming a successor trustee in the event that an individual dies or an institution dissolves.

We can also help you designate co-trustees if you wish to have a family member or trusted personal friend standing by to access the trust’s assets or make key decisions as needed.

Ensure the Trust Has the Proper Legal Protections and Accounting

Trusts can be subject to the same risks as any individual: fraud, lawsuits, or even competing claims on the assets contained within them. A properly worded trust document and a legally informed trustee can help the trust mitigate risks like these.

Your New Mexico attorney can prepare you and your trustees for trust accounting. Most trusts need to file income and tax reports regularly to the IRS, just like an individual or a company would.

We can assist you in preparing for these duties while providing easy-to-follow instructions so that your trustee can keep up with their obligations with minimal confusion.

Reduce the Risk of Unintended Consequences

A trust can fall victim to unintended outcomes, especially if it is irrevocable. Any trust can end up in hot water if there is a sudden market disruption that threatens the solvency of its assets.

New Mexico Financial & Family Law will help you consider possible future risks and build contingency plans to help your trust avoid possible threats.

We can also help you anticipate reasons that a trust would be unable to succeed in your specific goals, along with ways to minimize the risk that these threats would undo your carefully laid plans.

How Does Setting Up a Trust in New Mexico Work?

All trusts can be set up through the following process, although other decisions may need to be made if the trust has a special purpose or function.

1. A trust type is chosen based on the goals of the trust creator (grantor) — After reviewing their financial portfolio and other goals, the creator of the trust (called the grantor or settlor) decides on the perfect type of trust for them.
2. Assets are selected to fund the trust — Any personally owned assets can be used, including cash, stocks, bonds, houses, personal belongings, and other forms of property. Some types of closely held business stock or equity can also be transferred into the trust. The assets should be chosen for their ability to meet goals, like value preservation or rapid growth. They may also be chosen because of their vulnerability to creditor claims if the goal of the trust is asset protection.
3. A trustee is selected — The trustee is responsible for managing the trust, keeping up with required documentation, and seeing to it that chosen beneficiaries receive distributions as instructed. Your trustee should also be capable of problem-solving, such as selecting a qualified law firm to help them handle any disputes involving assets held in the trust.
4. Beneficiaries are designated — Your beneficiaries will receive distributions of trust income or assets based on your instructions. You can name specific beneficiaries or create room in the trust’s language for future possibilities, such as the children of your grandchildren.
5. Trust rules and language are created — Your New Mexico setting up a trust lawyer ensures that your trust is structured the way you want, with specific instructions and other language to guide the decisions of the trustee.
6. The trust is funded — A trust is only created when assets are transferred into it. This process is similar to signing over the deed of your home or the owner of your accounts to another person, except it is the trust. Transfer of assets may also be delayed, such as if the trust is only created and funded at the time of your death.

Key Traits to Decide on When Setting up a Trust in New Mexico

There are a number of key considerations to make when working with a New Mexico lawyer to set up a trust:

• Living vs testamentary trust — Living trusts are created during your lifetime, while testamentary trusts are created at the time of your death. Only living trusts can allow your assets to bypass probate.
• Revocable vs irrevocable trust — A revocable trust can be altered by the grantor or completely dissolved without necessarily needing permission from beneficiaries or the trustee. An irrevocable trust cannot be altered once it is funded unless all beneficiaries agree and the trustee follows through with their request.
• Grantor vs non-grantor trust — The grantor can designate themself as a beneficiary of the trust or even a co-trustee. This arrangement allows for all trust income to be reported as personal income. However, doing so can make assets vulnerable to creditor claims or prevent the use of certain tax exemptions.

Possible Benefits and Advantages of Setting Up a Trust in New Mexico

When deciding on the type of trust you want to create, consider the following benefits that can be gained, depending on how the trust is set up and how distributions are designated:

• Avoiding Probate — Possible with a living trust but not a testamentary trust.
• Ensuring Smooth Transition of Property — All types of trusts will follow stricter rules with more customization options compared to a will on its own.
• Setting up Rules for Property Distribution — You may want to delay distributions or only provide them for specific reasons, such as educational expenses.
• Negating the Need for Some Powers of Attorney — Designating a trustee to manage property means that your family may not need a durable financial power of attorney or conservatorship in the event that you are medically incapacitated.
• Reducing Estate and Gift Taxation — Some trusts have tax-advantaged benefits, including grantor-retained annuity trusts and charitable trusts.
• Protecting Assets — Irrevocable trusts may be able to help you protect certain assets from creditor claims or lawsuits.
• Gifting to a Charitable Cause — Charitable trusts can provide money to beneficiaries and a designated charity in a tax-advantaged way.
• Preserving Business Continuity — A business owned by a trust can operate as instructed, including designating a successor to manage the business when the original owner dies or becomes medically incapacitated.

New Mexico Setting Up a Trust Law Firm

When you need help setting up a trust, reach out to New Mexico Financial & Family Law. We have decades of collective experience in helping our clients with estate planning, trust formation, probate, and other important considerations.

Schedule a no-obligation appointment with a New Mexico law firm. You can depend on us today when you call us at 505-503-1637 or contact us online.