Estate planning documents should be tailored to fit your specific needs

 

Q:

            About a month ago my doctor told me that he paid a lawyer to have a trust prepared as part of an estate plan. My youngest son tells me that you can buy a fill-in-the-blank form for a trust at the office supply store. Is the fill-in-the-blank form the same thing as the trust that my doctor has? If so, why would you pay a lawyer to get a trust?

 

A:

            Trusts come in many different flavors and are used for many different reasons. It’s difficult to make a comparison without knowing if your doctor’s trust and the fill-in-the-blank form were intended to be used for the same purpose. But let’s assume that they were. Let’s assume that both trusts were intended to be used for estate planning purposes.

 

The legal requirements for establishing a trust are surprisingly simple. In general, a person need only show that he or she intends to create a trust, and then identify an item of property for the trustee to hold and manage for the benefit of the beneficiaries.

 

If the fill-in-the-blank form and the document prepared by your doctor’s attorney meet these general requirements, they are both valid trusts.

 

Is one of the documents better than the other? The answer to that depends on what you want to accomplish. If you only have generic needs, then a simple document might be enough for you. But if you have very specific goals that you want to accomplish, your trust document should have specific language to help you achieve those goals.

 

For example, if one of your beneficiaries is disabled and receives assistance from the government, your trust document needs to have special language that will let him enjoy the use of your property without affecting his eligibility for the government assistance.

 

If your trust document doesn’t help you achieve your goals then it’s worthless, regardless of what you pay for it. The very best estate plan is one that has all the documents necessary to address the issues that are unique to your family, your property, and your future needs.

 

Experienced estate planning attorneys can do more for you than just fill in the blanks on a form. They can:

 

• Ask questions to help clarify your goals

• Determine which documents need to be included in your estate plan

• Tailor those documents to address any issues that need special attention, and

• Advise you about anything that needs to be done after the documents have been signed

 

That last point is very important, especially if your estate plan includes a trust. Earlier I said that for a trust to be valid there must be some property for the trustee to hold and manage. Legal title to the property must be transferred to the trustee.

 

Over the years I’ve had several people ask me to review their trust document. Some of the documents were prepared by an attorney and some were not. In a few cases I discovered that the trust document had been signed, but no property had been transferred to the trustee. These people had been led to believe that, by signing the document, they had created a trust and nothing more was needed. In fact, what they had was an empty container.

 

The process of transferring your property to the trustee is sometimes referred to as “funding” the trust. Funding should be done with great care. Some assets should never be transferred to a trust. On the other hand, if you leave an asset out of your trust, it can’t be managed or distributed according to the rules you’ve laid out in your trust document.

 

Before you decide on a do-it-yourself solution, I would urge you to meet with an attorney that has experience in estate planning. Look for one that offers a free consultation. It’s a great way to try before you buy. To make the best use of your time, prepare a list of questions before you meet with them. Ask them how they would address the issues that are unique to your family, your property, and your future needs. If they do recommend a trust, ask them if they’ll complete the funding for you.

 

Disclaimer: This column answers a specific legal question asked by an individual in Texas. The answer may or may not match your individual situation. Be careful not to treat this column as specific legal advice, as it may not meet your individual needs. It may give you a solid basis for discussion with your own attorney. You should consult with your personal attorney before you take any action on this or any legal issue. Also, please be aware that laws change, so this column is valid only as of the date it was published. This communication does not create an attorney-client relationship between the author and the reader.