The Living Trust: Doing It Yourself?

So, you’ve decided that you want to do some estate planning. You know that a properly funded living trust will protect your assets from the time and expense of probate proceedings. Cost is an issue, so you’re considering the possibility of avoiding legal fees.
What are your choices? You could buy a do-it-yourself book or a computer software package and fill in the blank, or you could subscribe to an online service.
Now, wait a minute. If you got sick, would you self-prescribe your medications? (Probably not.) If you got one of those awful letters from the IRS, would you attend a tax audit without an experienced tax professional at your side? (Not a good plan.) If you suffered an attack of appendicitis, would you get a mirror and a sharp knife and perform surgery on yourself? (Hopefully not!)
Estate planning is too important to leave to amateurs. Most people are unqualified to identify or address all the relevant issues. Among the issues to be considered are these:
1. How should we provide for contingent beneficiaries or after-born heirs?
2. Should we use a sprinkling power or give a spouse a power of appointment?
3. What provision should be made for the postponement of possession of assets by a young beneficiary?
4. How shall we provide for a surviving spouse’s occupancy of Trust real property after the decedent spouse’s passing?
5. What assets should be sold, and when, to provide liquidity for the Estate?
6. Who is best qualified to administer your Trust Estate, in the event of your disability or death? A spouse, an adult child, a trusted family friend, a corporate fiduciary?
Such questions require the personal attention of an experienced attorney, and often the input of tax, insurance and financial planning professionals.
Once you have clarified your goals, your attorney can then draft appropriate language to help carry out your wishes.
Horror story of the week: One couple had their trust prepared by a cut-rate, unlicensed document preparer, then died. Because their trust lacked essential tax-avoidance provisions, their estate now faces a liability of over $250,000!
Even if you consider your estate to be modest in size, it’s all the money in your world! With a reasonable investment of time and attention, you may ensure that, at your passing, your estate will be administered and distributed in accordance with your wishes.
Jerry Kessler practices law in Santa Clarita. For further information, call 661-255-1001.