Trusts have become more popular estate planning documents in recent years. The availability of online information has helped alert people to the usefulness of trusts. There are even websites that offer boilerplate documents so people can create their own trusts without a lawyer.
People can theoretically plug in a few personal details and produce living trust documents in a matter of a few minutes. While this may seem like an efficient and simple solution when someone wants to establish a living trust, it can be a major mistake to use boilerplate documents or websites to generate crucial estate planning paperwork. The following risks inherent in trying to create a living trust without proper legal support makes online drafting a definite “No, thanks.”
Overly generic documents
The most obvious risk of establishing a living trust using online boilerplate documents is the possibility that the documents will not comply with California state law. Living trusts typically need to include very specific language and meet very clear legal standards to serve their intended purpose. Most websites that provide documents include a disclaimer advising people that they need to consult with an attorney or risk their paperwork not holding up in court.
Major funding mistakes
Properly funding a living trust is necessary for it to have any impact on beneficiaries and the grantor creating the trust. It is very easy for an individual trying to establish a trust without assistance to improperly manage the asset transfer process. In some cases, mistakes could trigger taxes that people would prefer to avoid or result in assets remaining under the ownership of the grantor rather than the trust. Individuals often need to execute secondary paperwork to properly transfer specific resources to a trust.
There are a host of other issues that could arise when trying to create a living trust without legal guidance. A grand tour may not realize that they can serve as trustee until they die or become incapacitated. On the other hand, they might fail to name a successor trustee, which means that there would be no one to take over their role should their health decline.
The choice to establish a living trust can give someone control over resources while they are still healthy and protection from certain risks as they age or after they die. Yet, getting the right help when establishing a living trust is nearly as important as the decision to create a trust in the first place, which is important to keep in mind.