01Estate Planning Is Not One Size Fits All, or Even Most
Estate planning documents found in books or online and those generated by estate planning software are specifically designed to cover only the most basic of estate planning needs. These generic forms are also deliberately kept as simple as possible to comply with the laws of all 50 states and the District of Columbia. Just as everyone's fingerprints are different, so are everyone's estate planning needs. Thus, what will work for you and your family will most likely be different from what will work for your sister, your parents, or your next door neighbor. The bottom line - a generic Revocable Living Trust generated by computer software won't do you or your loved ones any favors.
02Trust Laws Vary Widely From State to State
Unlike the federal estate tax laws, which apply to all U.S. citizens, state laws are all over the place when it comes to probate, state estate taxes, gift taxes, and inheritance taxes, and particularly wills and trusts, as well as the legal formalities required to write and sign a valid trust agreement. There are also many specific state issues that can affect a trust, including the definition of descendants, anti-lapse statutes, community property laws, homestead rights, common law marriages, putative spouses, and elective share laws. The bottom line - I find it hard to believe that a generic trust form can properly address all of these specific state law issues.
033. Books, Software and Online Programs Contain Disclaimers
Every book or software program about estate planning that I've come across contains this same type of disclaimer - "The information contained in this book/program is not legal advice and is not a substitute for legal advice. For legal advice, consult with an attorney." The bottom line - enough said about that.
04Buyer Beware - You Get What You Pay For
Would you perform your own surgery, repair your own car, or color your own hair? While doing things yourself will save time and money in the short term, the long-term result may not be what you expected. For example, a few years ago I met with a couple who had done a Revocable Living Trust using a well-known financial guru's estate planning software program. The couple lived in Florida, and yet when I looked at the trust agreement they had created with the software, it stated right on the very first page that it was governed by Nevada law. What was wrong with this? Florida is a separate property state while Nevada is a community property state, which completely turned the couple's trust into a nightmare to understand and administer. Why was this the result? Because the couple didn't know what they were doing when they created the trust using the generic software, and so a generic form was generated that ended up being totally inappropriate for their situation. The bottom line - generic may work for groceries and drugs, but not for your estate plan.
05What Is the Very Bottom Line?
Estate planning is not something that you should do yourself, without the assistance of a professional. Just as seeing a dentist to stop the pain in your tooth makes sense, seeing a qualified estate planning attorney who is familiar with the probate, trust laws and estate tax laws of your state to create and maintain your Revocable Living Trust makes sense. And don't forget about real estate that you own outside of your home state - chances are the trust laws there are different from the trust laws of your home state. The very bottom line - the time and money that you spend on the services of a qualified estate planning attorney to assist you with drafting and funding your Revocable Living Trust will certainly pay off in the long run.
The Traps and Pitfalls of Do it Yourself Revocable Living Trusts
Should you attempt to write your own Revocable Living Trust? During my 18 years of practice as an estate planning attorney, I read my fair share of do-it-yourself Revocable Living Trusts. I can legitimately say that the resounding answer to this question is No, do not attempt to write your own Revocable Living Trust, even with the help of books, computer software or online programs such as LegalZoom. Here is a summary of the reasons why not.