Not All Living Trusts Are Created The Same

It’s best to have the help of a professional when creating a trust — you could end up making costly mistakes if you go the DIY route

The digital age provides us with many opportunities to write our own wills, create trust documents, transfer assets… Just log on to LegalZoom and…


When it comes to legal matters, and particularly when it concerns one’s property and financial assets, it makes no sense to go the route of a do-it-yourself solution: forget those templates you found on the Internet, and the ‘will’ documents you can pick up at your local box store.

What’s needed, of course, is a thorough understanding of the consequences when you’ve chosen the wrong document, or forgotten to add pertinent details to legitimize your will, or trust, many years later.

In short, don’t wake up at the age of 70 to realize that when your wife died, you could’ve done something with her share of the assets to relieve the tax burden you’re now facing. Or, that you forgot to transfer that vacation home into the trust.

You thought you had a legitimate living trust…

First of all, both the will and a living trust are used to give directives on how you want your estate distributed upon your death. The former can be subject to probate, particularly with the ownership of out-of-state property, and becomes a part of the public record.

A living trust does not undergo probate proceedings, and if out-of-state property is involved, the trust also keeps that property from probate. Ultimately, the document remains a private affair without the fear of personal data becoming part of any public record.

So, why not use one of those quickie downloads to write your living trust?

Forbes Magazine Cautions about DIY Estate Planning

Take a look at a Forbes’ overview on just this topic and read about a real pickle someone got themselves into by following the DIY-route.

For sure, both the will and living trust can can designated to move assets from one owner to another, as Deborah L. Jacobs, a Forbes staff writer, points out. Moreover, count on the living trust to hold your assets via a trustee while you’re alive. Then, if you become unable to make your financial decisions, the trustee will step in to make such decisions for you.

Jacobs relates the unfortunate circumstances surrounding an individual’s decision back in 1984 to establish his own trust—a three-pager, to be exact. He included a newly purchased business in a 3-page document (trust), and even made sure to record the deed when he transferred his home into the trust.

Then, a big “oops!” occurred when he mistakenly dated the deed one year prior1983. Another big “oops” again when, in 2009, he paid off his mortgage and thought he could borrow against it: the title people said, sorry, but you “didn’t have a clear chain of title.”

By this time, 25 years after he set up his trust, he was 75 and realized he was in the proverbial pickle.

How did he solve his dilemma? It cost him about twice the amount to fix it than it would have if he’d simply sat down with an attorney to draw up the documents to begin with.

Trusts are not just for the ‘rich.’

Simply put, the documents are really that gold standard to protect what you’ve worked so hard to earn. What’s more, as noted in yet another Forbes overview:

“It can safeguard your assets should you no longer be able to handle your affairs, provide for children from a previous marriage, hold money for minors (ensuring they can’t spend it all the minute they reach majority); and prevent funds from being eroded by spendthrift family members. A trust can also protect assets from creditors and former spouses, whether yours or those of your heirs.”

Contact us. Let’s start the conversation about estate planning, and what needs to be done to carry out your future wishes.

Castle Wealth Group Legal in Media

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