Living trusts can be dangerous. Actually it is not the living trust (ordinarily a revocable living trust) but the person helping you form a living trust that may be dangerous.
Primary Risk in Forming a Living Trust
One of my regular themes is the importance of considering the source of any information. This is especially true when it comes to the cost of forming a living trust.
Because of the great interest in living trusts and the fact that the elderly are often most interested (many of whom are unfortunately ill informed), there are many predatory types circling for a kill.
It is worthwhile to gain an understanding of this problem. Be sure to take time now to learn a little about this danger and avoid a lot of unintended negative consequences.
Explore Living Trust Dangers
The California attorney general’s office has prepared a helpful paper explaining this issue. Check it out: Living Trust Mills.
Another excellent article is offered by the Michigan attorney general’s office. It can be found here: Beware of One Size Fits All Estate Plans & Free Lunch Seminars.
A living trust can be extremely important in planning for your future. Just get the facts first and be sure any assistance you get is from a trusted source.
How to Form a Revocable Living Trust
You can get a free dinner and other “gifts” for attending an informational meeting in which you may be convinced to spend two or three thousand dollars for what you could get done for a lot less from a local lawyer or almost for free by doing it yourself (check out the Nolo article, Making a Living Trust: Can You Do It Yourself?) or using one of the online services.
But my advice is to also enlist the aid of a local attorney who specializes in estate planning and elder law. They should also be knowledgeable in the areas of probate and real estate law.
NOTE:
There are small errors in preparing your trust that can have serious consequences. That is why I would prefer using a lawyer in this case even though some suggest it is unnecessary. To be clear, I am talking about a respected lawyer who knows the laws applicable where you live.
For example, if you unknowingly change the tax status of your property incorrectly you could create a situation that costs thousands in unanticipated expenses to your heirs if not to yourself.
If you take advantage of something like some of the online information mentioned above to help you gather the information you need and are willing to do some of the leg work yourself, you can keep your costs down. Negotiate with your lawyer.
Form Your Revocable Living Trust Safely
Finally, your cost to form a revocable living trust will be limited if you work with a reputable local lawyer who only charges you for what you need, and you will avoid scams as well as simple errors.
