Who's Afraid of the Living Trust?

Years ago, when living trusts were new and many issues about them had not been clearly settled, it was important to get experienced legal assistance in establishing a living trust. Naturally, this was a fairly expensive proposition, one that could easily cost a couple of thousand dollars.

Nevertheless, this was money well-spent for people with even fairly modest estates, because of the great simplification of the process of administering a living trust rather than a will, and of the cost reduction that comes with such simplification.

As the living trust matured and laws among various states became more standard, it became possible to develop living trust "kits" which had forms that were valid in many states. Aside from the cost savings of using living trust kits instead of lawyers, the multi-state form kits had the obvious advantage that the living trusts set up with them could remain valid even if the person moved to another state.

Meanwhile, a group of slimy entrepreneurs recognized an opportunity: sell people on the great value of living trusts, then sell them a living trust kit, which might be available elsewhere for under $20, for thousands of dollars.

To be sure, people trying to sell such kits for thousands of dollars are shysters, but look carefully at those who would have us ignore both these shysters as well as the very modestly priced living trust kits:

Do you think it's possible that the members of the bar association might be concerned that living trusts could cut into the legal fees that are generated when estates are probated? Do you think that the Attorney Generals mind coming across as protectors of the consumer, while receiving praise from the same members of the bar that will take money out of your wallet or purse after you're dead?

Now the FTC has gotten into the act by issuing its own warning about living trusts, even though they've received, on average, fewer than 4 complaints a month?

Several of the links included in the FTC's living trust brochure warn about the dangers of not using a licensed attorney if you insist on having a living trust, on the theory that the sale of a self-help book or kit may constitute the "unauthorized practice of law." One of these links even warns that a poorly-designed living trust (i.e. one not written by a lawyer) will cause the state to decide who takes care of your minor children when you die.

Let's face it: the Attorney Generals of each state are in bed with the lawyers, and the FTC is in bed with the Attorney Generals. If you're hoping to find advice that may save some attorney's fees, these are not the people to trust.

The Cagey Consumer's Opinion

Having a will, rather than a living trust, is not necessarily the disaster that the living trust shysters would have you believe. Paying a thousand dollars spent for a cookie-cutter living trust is not money well-spent. On the other hand, paying a couple of thousand dollars for a customized trust prepared by a lawyer is probably not necessary either.

But there is one source with the reputation that can give you the confidence to create a living trust without paying large legal fees. That source is Nolo Press, a self-help law publisher that has been in business since 1971, which means there has been plenty of time to prove the value of their publications.

Texas even tried to ban Nolo, but the state legislature gave into public pressure to give up on a case the state would surely have lost if it ever made it to the Federal courts. Don't let the FTC or other "defenders" of the public scare you away from using a living trust which you can create for yourself with a reasonable effort and a minimal amount of money.

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Updated July 12, 2000