Estate Planning Is Not About What You Own... It's About What You Value.

DIY Trusts Rarely Work!

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We often hear that our fees are higher that many would like to pay, especially in light of online services or software that supposedly enable a person to create their own trust.  Why wouldn’t a person want to take advantage of something that may save them a $2,000 or more?  Everyone wants to save money, right?

Unfortunately, having a document is only one small part of the puzzle.  Having documents that say the right things for your particular situation is a significant step in the right direction, but having all of your assets properly coordinated with your trust plan can be even more important to accomplishing your goals.  DIY trust plans rarely work!

In the last couple of weeks, we’ve seen two trust plans that may be litigated because the deceased grantor tried to do some part of their trust without the guidance of an attorney well-versed in estate planning.  Trying to save a few hundred dollars could lead to over $100,000 in litigation costs, not to mention the associated stress, conflict and destruction of the familial relationships that are always part of the litigation equation.

In one of these estates, a fellow attempted to create his own trust plans with a software package he purchased.  Unfortunately, not understanding the terminology and principles involved, he created a document that repeatedly contradicts itself and is virtually impossible to interpret.  It gives conflicting directions on who should serve as a successor trustee.  It directs that a surviving spouse should get just the income from trust assets at one point, but then directs that she should get both income and the principal of the trust at another.  Then, it says that when she dies, the remainder of the trust should be delivered to the surviving spouse!  Hello, McFly!

In addition, only about half of the assets are in the trust.  There is no will to direct what should happen with those probate assets, so under the Utah probate code, the surviving spouse would get the first $75,000 and one-half of the remainder, with his separate children splitting the other half.  However, a poorly written DIY post-nuptial agreement states that she should not receive anything from the probate estate.  But, because of a number of factors that a good attorney would have advised him of, there is a significant chance this post-nuptial agreement may not withstand a challenge by the surviving spouse, and with a few million dollars at stake, she has incentive to challenge it.

Upon reviewing the situation, we advised the client to simply get into mediation and work out a deal with the surviving spouse.  Litigating the trust questions and the probate could easily run attorney fees for the parties into six figures.

Cutting corners by using the quickie $700 trust an attorney or using DIY approaches often produces these results.  At Alder Law Group, we want to make sure your plans work!  We will advise on what provisions will best benefit your situation and we will help you ensure that the assets are properly coordinated to achieve your stated goals.

 

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