A revocable living trust acts as the foundation of a well drafted estate plan. Many attorneys use this document and, generally speaking, doing so is the right move for many clients. However, there are certain individuals and families that might have estates not requiring this particular instrument. And if that is the case, why pay the cost of a full, trust-based estate plan?
As an estate planning lawyer, I earn my living helping my clients plan for the future, both for their own peace of mind and to help make an already difficult time more bearable for their loved ones. It is an important job and I am proud of what I do. But there are times when clients have requested that I draft a living trust for them without fully understanding the purpose behind the document. This occurs because (and let’s be honest) television has convinced everyone and their pet poodle that it’s the only way to go. However, after careful review of each individual case, I sometimes point the client in another direction. Specifically toward free, government offered, documents. Yes, you read that correctly- free.
Perhaps the most common situation where people inquire about a living trust without needing one is the young family with few assets. And as the proud father of a little baby girl myself, I feel it’s my obligation as a good person and responsible lawyer to give the best advice I can. Such young families usually include couples with a minor child or two. I applaud these families who are doing the responsible thing by planning for their family’s future. However, if they come to me with relatively few assets and no real estate, I don’t believe I’m looking after their best interests by automatically sending them away with a full trust-based estate plan. In the end, they can do as they wish, but at the very least they need to know they have other options.
In this situation, rather than paying me my reasonable fee, they can download a few key documents for free and keep saving their money to build a larger estate to pass onto their children. The most important legal documents that a young family requires for basic protection are Durable Financial Powers of Attorney, Advance Health Care Directives, and Wills.
With these documents, a young family can ensure that checks made out to them are cashed and insurance premiums are paid on time if something causes the incapacitation of one or both spouses. In the case of minor children, the Will can be used to nominate the proper guardian of their little ones. If the parents don’t nominate a guardian then the court will appoint one without their input. And lets be honest, as well meaning as a judge might be, no one is going to understand your family dynamic like you do. The Will is also used to transfer assets at the time of death. If such a family has an estate valued under $150,000, then often times they can avoid the frustration and expense of probate court all together.
Finding the proper estate plan for a family or individual is unique to each situation. What’s best for one family or individual might not be right for another. However, at the end of the day, I would be remiss if I didn’t educate each potential client regarding all of their options.