When it comes to the subject of estate planning, most people acknowledge the need to have an estate plan in place; yet, over half of all Americans do not have one. Of the many reasons people offer for why they have yet to create an estate plan, a lack of both time and money top the list. Without a doubt, the average American lives a busy life and finding the time to consult with an attorney may be difficult. It is also true that going the “Do-It-Yourself (DIY)” route saves money that would otherwise be spent on an attorney. You may, therefore, find yourself wondering if you need a living trust lawyer to create a simple trust that you wish to include in your estate plan. A simple “yes” is likely insufficient to convince you of the need for professional advice and assistance when creating any legal document. A better understanding of how a living trust works, and the role one might play in your estate plan, however, may help you to understand why you should not go the DIY route.
At its most basic, a trust is a relationship whereby property is held by one party for the benefit of another. A trust is created by a Settlor, who transfers property to a Trustee. The Trustee holds that property for the trust’s beneficiaries. A testamentary trust is one that activates upon the death of the Settlor via a provision in the Settlor’s Last Will and Testament in most cases. A living trust activates as soon as all formalities of creation are in place. Living trusts can be further sub-divided into revocable and irrevocable living trusts. As the names imply, a revocable living trust is one that can be modified or revoked by the Settlor any time and without the need to provide an explanation. An irrevocable trust, on the other hand, cannot be modified or revoked by the Settlor after the trust activates. Because a testamentary trust is triggered by the Settlor’s Will, and a Will is always revocable up to the point of the Testator’s death, a testamentary trust is always revocable.
Why You Need a Living Trust Lawyer
The basic concept of a trust agreement is not particularly difficult to understand; however, creating a trust agreement can be very complex as can administering a trust. Without an experienced trust attorney to provide you with guidance and advice during the creation of your living trust, a wide range of things could go wrong, including:
- Creating the wrong type of trust. Do you need a revocable or irrevocable living trust? For that matter, are you sure a living trust is what you need instead of a testamentary trust?
- Appointing the wrong Trustee. One of the most common mistakes Settlor’s make is appointing someone close to them as Trustee without stopping to objectively consider if the person is capable and willing to fulfill the duties required of a Trustee.
- Using the wrong language. Some living trusts, such as a Medicaid trust or a Special Needs trust, require very specific language to be recognized and accepted.
- Failing to include all assets. If the point of your trust is probate avoidance, leaving any assets at all out will defeat the purpose.
In most cases, it is the beneficiaries and loved ones who pay the price when someone goes the DIY route to create a trust. More often than not, problems with the trust agreement cause the trust to end up in litigation, ultimately causing the trust beneficiaries to spend considerably more time and money than the Settlor saved by not utilizing the services of an experienced attorney. If your goal is to ensure that your living trust functions as intended, and you don’t want your loved ones to end up in a protracted legal battle at some point, you need a living trust lawyer to help you create your trust.
Contact a Living Trust Lawyer
Please feel free to download our FREE estate planning worksheet. If you have questions or concerns regarding the creation of a living trust in Illinois, contact an experienced living trust lawyer at Hedeker Law, Ltd. by calling (847) 913-5415 to schedule an appointment.
Latest posts by Dean R. Hedeker (see all)
- Top 5 Retirement Destinations for Ex-Pats - May 23, 2019
- Who Should Be Designated as the Successor Trustee for My Revocable Living Trust - May 21, 2019
- Questions to Ask Yourself When Creating a Living Trust - May 17, 2019