If you've decided you want a living trust to avoid probate, how should you proceed? Do you need a lawyer, or can you make a living trust yourself? With a little education, most people can draw up a perfectly legal living trust for next to nothing. Read on to learn how living trusts help avoid probate, how to make a living trust, and whether you can make one yourself.
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, it will cost you about $30 for a book, or $100-250 for a service such as WillMaker & Trust. If you hire a lawyer to do the job for you, get ready to pay an average of between $1,000 and $2,000.
You may assume that paying thousands of dollars 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:
After the trust is drawn up, you sign it in front of a notary public.
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. (See this survey on people's experiences with do-it-yourself estate planning.)
But 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. For example, you'll want to consult an attorney if:
But even if you do go the lawyer route, it's worth doing a little research on your own; it's a lot more cost-efficient than paying a professional to educate you about the basics.
Look over the state list below to learn more about living trusts in your state.
For help on choosing a good estate planning attorney, read How to Find an Excellent Lawyer. Or you can go to Nolo's Lawyer Directory for a list of estate planning lawyers in your geographical area (click on the lawyer's or law firm's profile to learn about a lawyer's experience and philosophy).