Whether you need a trust for your estate plan is a highly individual decision. This week, I’ve had two different consultations where we’ve had pretty in-depth conversations about trusts. As best I can tell, both clients had recently read a book or blog that had the theme “Everyone Needs a Trust” in it. Unfortunately, I couldn’t pin down with either of them exactly where it had come from. But one of them had met with another attorney who said absolutely they needed a trust! (However, they were in my office because the fees quoted to them were astronomical and the reviews online for the attorney were not spectacular. Their friend recommended me and after checking out my reviews, they were in my office the next day…) The other client had a neighbor who had a trust and thought it would be a good idea to just copy what the neighbor had

Why You May Not Need a Trust

Do you know who really wants you to get a trust? The person who gets to prepare the documents for you. As attorneys, when we prepare an estate plan with a trust, there is more work for us. It takes more documents to be drafted. You need to fund the trust with assets. And it all needs to be done properly. Shockingly, some online document sites offer a trust for a flat fee as low as $279?!? If that sounds like a deal that is too good to be true, it probably is. The complexity and work that goes into setting everything up would make me wonder about what you get for that price. (By the way, I know what you get, you or your heirs get a monster legal headache down the road…)

You may also have a variety of assets that wouldn’t be appropriate for a trust. You could have stock options, investment real estate or stock in a closely-held business with transfer restrictions. These assets could require probate and defeat the purpose of the trust. Many people want a trust so they can avoid probate. But then they create a revocable one that just creates more work for their trustee and the probate court.

Even if you’ve funded it properly, that is often not the end of it for you. You will acquire and sell assets throughout your lifetime. If they are trust assets, then you need to make sure you are keeping the trust funded as these assets are transacted. If you’ve worked with a professional, that process can be managed for you. But if you’ve tried to DIY the whole process, you could be in for a lifetime of time and attention you weren’t planning for.

While it may sounds like I am “Anti-Trust”, I really am not. There are plenty of clients who I meet with who need one. It would be an important part of their estate plan. But there are just as many clients who I meet with who have read about one in a book or someone told them an incomplete story about how they set one up themselves. Those are the folks that worry me. So if you are considering a trust, it’s not something to DIY or take lightly. Meet with a professional and fully explain why you want one and what your goals are. You may be pleasantly surprised that you have made the right choice. Or you may find that you can save yourself a lot of money by not using overly-complex planning that is not necessary.

Next Steps

Of course, if you don’t have a will or a trust yet, or if you have one that you may need to update, call my office to set up a legal strategy session and we can review the best options for you – (877) AMAYERS.

Andrew Ayers
Connect with me
I work with business and estate planning clients to craft legal solutions to protect their legacies.
Post A Comment