Can You Create a Trust Without a Lawyer?
The estate planning process can be confusing, especially if you have many assets to account for. You may decide to establish a revocable living trust rather than a will but wonder, “Can you create a trust without a lawyer?” Discover the answer in this guide from Arizona’s competent trust attorney and legal team at Lincoln & Wenk, PLLC.
Why People Create Living Trusts
Before we explore the ins and outs of establishing a trust, it’s important to understand living trusts and why many people open them during the estate planning process. Living trusts have several advantages over a standard will because they allow you to designate your assets to a trustee of your choosing, and upon your death, the successor trustee will distribute your assets according to your wishes.
A living trust doesn’t replace a will, so it’s wise to have lawyers draw up a will to address any issues that a trust document doesn’t cover, such as who you want to be the legal guardian of your children at the time of your death. However, a living trust has one major advantage over wills: probate avoidance.
If you die with a will outlining your assets and final wishes, your estate must go through probate court. This months-long process can be stressful for your loved ones as they must wait for your assets to transfer to them. During this time, creditors may contest the estate and try to take a share of the assets in addition to your loved ones facing estate taxes and court fees.
Creating a living trust allows your loved ones to bypass probate at the time of your death. The trust makes for an efficient transfer of assets, including real estate and other large-ticket items. Unlike a will, which becomes a part of the public record upon death, a revocable living trust remains private.
How To Establish a Living Trust
Can you create a trust without a lawyer? Yes, it is possible to create a trust without the help of an estate planning attorney. You may draft a standard living trust document by following the steps below.
Name the Grantor
The grantor or trustor is the person whose assets will enter the trust. If you’re creating your trust, list yourself as the grantor. If you’re helping a parent or loved one draft their trust, put their name.
Name a Trustee and Successor Trustee
One of the biggest benefits of a living trust is that you can manage it until your demise. You can name yourself the trustee, meaning you’ll have full control over it for the remainder of your lifetime. You’ll also have to list a successor trustee in the draft.
This person will take control of the trust when you pass and take care of the following:
- Trust funding if you become incapacitated
- Distribution of assets
- Carrying out your final wishes
Your successor trustee should be someone you can rely on to fulfill your final wishes, such as a spouse, sibling, child, or close friend. Remember that the person you choose should be comfortable in that role, so discuss it with them first before designating their name on any relevant paperwork.
Name Beneficiaries
Now, it’s time to name your beneficiaries or the people to whom you want to leave property and other assets. You could choose one beneficiary for your entire estate or split everything among several loved ones.
Remember the ages of your beneficiaries and designate a responsible adult to manage the property if your beneficiary receives it as a minor. For example, if you leave all of your assets to your child and die before they turn 18, you should plan ahead and have someone in your trust who can act on your child’s behalf until they turn 18. This could be a sibling, parent, or close friend.
Sign and Notarize the Trust
Not only can you create a trust without a lawyer, but you can have it go into effect by signing it. Arrange for a notary public to witness you signing it to establish the trust. All of that said, there are still some potential complications to consider, which we discuss below.
Understanding Trust Funding and Tax Implications
You might think making a trust without an attorney won’t cost you anything. While you’ll save on lawyer’s fees by going the DIY route, establishing a trust requires money and effort to fund it with your assets. The steps you’ll need to take to fund the trust include the following:
- Establishing a deed to transfer your real estate to the trust’s name
- Adjusting ownership of your financial accounts
- Retitling your personal property into the trust’s name
You also have to think about the tax implications that come with a trust at the time of your death. Your successor trustee and beneficiaries will face estate taxes on your assets if you have a revocable trust. An irrevocable trust typically does not come with estate tax implications; however, you may not make changes to the trust after establishing its terms.
A revocable living trust may be ideal if you anticipate making any adjustments to your estate planning. You might need to make modifications if something happens to your beneficiaries, you wish to add new beneficiaries, you purchase a new property, or you wish to name a new successor trustee. Remember that this type of trust will be subject to estate taxes, which could impact the financial assets your loved ones receive at the time of your death.
Benefits of Working With an Estate Planning Lawyer
Can you create a trust without a lawyer and experience no issues with your estate moving forward? Establishing a living trust on your own is possible, but you might face unexpected challenges by not consulting a qualified estate planning attorney. Below is a breakdown of why it’s worthwhile to build a living trust with the help of a professional lawyer.
They Understand State Laws
Unless you have any legal experience, you’ll likely be at a loss when understanding your state’s laws regarding estates. You might end up with an ineffective trust by creating it yourself and failing to meet the state’s requirements. For example, some states require you to sign your trust in front of only a notary, while others say the trust only becomes valid when you sign in front of a notary and other witnesses.
An attorney will draft your trust so it contains all your final wishes and follow the appropriate legal process to validate it. They will also ask any questions about funding the estate and the steps you must take to allow for a seamless property transfer upon your death.
They Can Assist With Complex Estates
Not all living trusts end up being straightforward. If you have many assets you want to distribute among multiple beneficiaries, hiring an estate planning lawyer who can draft the trust without any issues is wise. The following are a few scenarios that may enhance the complexity of your trust:
- Establishing conditions, such as leaving money to loved ones when they hit a certain milestone (reaching a specific birthday, getting married, etc.)
- Listing beneficiaries who are minors and require an adult to manage their assets until they’re of age
- Planning to give charitable gifts from your estate and leaving assets to your loved ones
Instead of asking, “Can you create a trust without a lawyer?” it’s better to ask, “Should you create a trust without a lawyer?” The process may be tricky, especially if you plan on leaving assets to a wide range of beneficiaries or want to make conditions for when they can receive your assets.
They Can Assess the Trust’s Tax Implications
Creating a trust helps your estate avoid probate, but it doesn’t always mean you can evade estate taxes. A knowledgeable attorney can explain the tax liabilities of your trust and whether any of your assets will face taxes. Situations that may impact the tax implications of an estate include:
- The estate’s worth compared to federal estate tax exemptions
- Generation-skipping taxes
- Any debts you owe creditors
Working with an attorney helps you choose the right path for your estate.
They Serve as an Asset for You and Family Members
Having a seasoned estate lawyer on your side can help you solve unexpected issues. They can assist you as the grantor if you need to modify your trust and explain your final wishes and the legal aspects of your trust to loved ones should conflicts arise after your death.
Plan for Your Future With Qualified Estate Planning Lawyers – Contact Lincoln & Wenk, PLLC
How can you create a trust without a lawyer? Who benefits from a living trust, and why should you consider establishing one? Trust the legal team at Lincoln & Wenk, PLLC, to answer these questions and more.
Contact our firm if you need seasoned estate planning lawyers to guide you through the legal twists and turns of the estate planning journey and give you peace of mind. Call 623-294-2464 to schedule a consultation today.