Making a Living Trust: Are Lawyers Optional?
Many people don't need a lawyer to create a living trust.
For many Americans, a significant goal of estate planning is to avoid probate. A revocable living trust, unlike a will, offers a fast, private, probate-free way to transfer one's property after death. Although a living trust is not a complete substitute for a will (it doesn't allow you to name a guardian for a child, for example), it is definitely a more efficient way to transfer property at death, especially large-ticket items such as a house.
Assuming you decide you want a revocable living trust, how much should you expect to pay? If you are willing to do it yourself, with the help of books or software offered by Nolo and other publishers, it will cost you about $30 for a book or $50 for software. If you hire a lawyer to do the job for you, get ready to pay between $1,200 and $2,000.
You may assume that paying $1,000 or more for the assistance of a professional means you'll receive good value -- you get what you pay for, right? Maybe not. If you are willing to invest a couple of hours of your time using a top quality do-it-yourself resource, you may end up with just as good a result.
To understand why most lawyers charge too much for a living trust and why it is safe to do it yourself, it helps to know that a living trust is about as easy to prepare as a will. To draft a standard living trust -- which is what most attorneys offer -- you start with a lot of legal boilerplate (off-the-shelf legal language) and add the following information:
- The name of the person creating the trust (called the grantor, settlor or trustor). If it's your trust, that's you.
- The name of the person who will manage the trust (the trustee). Again, if it's your trust, this is you. That's right, the same person creates it and controls it.
- The name of the person who will take over as trustee and the distribute property in the trust when the trustor dies or becomes incapacitated (the successor trustee). Most people choose a spouse, grown child, or close friend.
- The names of the people who will receive the property in the trust (your beneficiaries, just as with a will).
- The name of a person to manage any property left to young beneficiaries.
Once the trust is drawn up, you sign it in front of a notary. Finally, to make the trust effective, all property to be distributed under its terms must be transferred into the name of the trustee using a deed or other standard transfer document.
If it's this easy, why not do it yourself? Many people do, quite successfully. Consider hiring a lawyer if you have questions about your particular situation or a thorny estate planning issue that a basic living trust just doesn't address. But first, do a little research on your own -- it's a lot more cost-efficient than paying a professional to educate you about the basics.
Nolo Resources
You can create a living trust document using Quicken WillMaker Plus (Nolo). The program takes you through a step-by-step interview, asking all necessary questions and explaining legal issues along the way. You can also use Quicken WillMaker Plus to make the following documents, which will automatically reflect the laws of your state:
- AB (bypass) trust
- legal will
- financial powers of attorney, and
- health care directive (living will).
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