Читать книгу The Living Trust Advisor - Condon Jeffrey L. - Страница 12

This book’s title may have given you the impression that I am going to tell you how to establish your Living Trust on your own – without having to pay for a lawyer.

I hope I did not get your hopes up. This is not a “how to become your own lawyer” book. You would never consider being your own doctor. Why would you even think about being your own lawyer?

Certainly, taking the lawyer out of the process probably sounds pretty good to you. After all, if you are like most people, you have never before met with a lawyer, because, quite simply, you never had to. You have never been sued or divorced. You have never sued anyone. You have never been charged with a crime. You have not set up a corporation or partnership or engaged in a complex business transaction.

Indeed, you may have gone almost your entire life without the need to consult with a lawyer. I said “almost,” because now you face the prospect of an inheritance document that, while simple in concept, can be quite daunting to construct. If you have seen a Living Trust before, you have found that they are somewhat lengthy. In my office, the typical Living Trust is 50 pages long.

But even though your head says you need a lawyer to help you through the minefield, your heart may be urging you to do it alone. Why? Because you have heard the lawyer horror stories from your family, friends, and co-workers. “My lawyer charges too much.” “My lawyer never returns my calls.” “I paid my lawyer a retainer months ago, and I haven’t seen any documents yet.” And on and on.

Of course, there is nothing to stop you from giving it the old college try. In fact, you will find a lot of help. There are a host of how-to books, software programs, and stationery forms, replete with terms and provisions that you can pick and choose to incorporate into your own Living Trust.

In all my years as an inheritance-planning lawyer, I have met with hundreds of do-it-yourselfers who have paid me a fee to review their efforts. Yes, that does sound inconsistent. Why would they want to pay me a fee to review their self-drafted Living Trusts when their main goal was to avoid paying me a fee in the first place? Their answers were universally the same: “I just wanted to be sure that everything is legal.”

Let me tell you something, and please consider this your first piece of my advice. If you prepare your own Living Trust, it will be wrong in some way, shape, or form.

Maybe it will be a harmless error, such as explaining estate tax concepts with outdated language. Does your Living Trust use the term A-B Trust to incorporate the plan of preserving the deceased spouse’s applicable exclusion amount? That is the right concept, but the wrong words. The use of the wrong language will not be fatal to that tax-saving plan, but the Living Trust is, technically, still wrong.

Maybe the mistake will be overkill. Several times a year, I review self-drafted Living Trusts that contain complex tax-reduction plans that would be appropriate only for the heads of Fortune 500 companies. But the persons who drafted those Living Trusts are nowhere near that wealth category. If those persons die with those plans in place, their beneficiaries will be stuck in a morass of expensive and unnecessary processes.

Maybe the mistake will be fatal to your children. One man came into my office explaining that his son was a drug addict. After reviewing the Living Trust he prepared with the help of the Trustmaker software program, I said to him with all the sarcasm I could muster: “Why does your Living Trust leave your drug-addicted son his inheritance share outright and under his full control? The second he gets his inheritance, he’s going to turn it over to his pusher!”

After having reviewed hundreds of self-attempted Living Trusts, I have never seen one that has been correct, complete, or appropriate for the circumstances. It doesn’t matter how smart you are, and what you do for a living is irrelevant (unless you are an inheritance planning attorney). There are too many subtleties and intricacies concerning your inheritance instructions in the Living Trust that the how-to books just don’t pick up. You don’t realize this because, in a circular bit of reasoning, the how-to books have not made you aware of them. In other words, you don’t know what you don’t know.

Financial Advisor Alert

When your clients tell you that they have a Living Trust, your follow-up question should always be, “Did an attorney prepare that Living Trust?” If the answer is no, tell them that out of an abundance of caution, they should have it reviewed by an attorney. Expect the response to be of the “We did this on our own to avoid attorney fees” variety. To that you say, “No matter how much energy you poured into your self-drafted Living Trust, you just don’t know if you drafted it correctly. One mistake could lead your family into post-death chaos. One meeting with an attorney to review your Living Trust will give you the peace of mind that you didn’t miss anything.”

The only true way to learn about the dos and don’ts of the Living Trust is the hard way – from on-the-job training. That is why my profession is called the “practice” of law. We get to practice this stuff until we get it right.

For example, when I was a young attorney, I was innocent in my approach to drafting my clients’ inheritance instructions in the Living Trust. When my clients told me there would never be any inheritance conflicts between their children, I believed them. After all, who was I to dispute my clients’ conclusions about their children?

Nothing, however, prepared me for the harsh reality of human conflict when my clients’ perfect children divided their inheritance. Lawyers are not taught to recognize inheritance conflicts in law school. There are no advice books or classes on this subject. The only way I learned about inheritance conflicts was from having a number of clients die and then dealing with their children when they divided the family money. Having observed what happens between children following their parents’ deaths, I have arrived at this indelible conclusion: Your children might seem perfect – but you really don’t know them until they divide your money.