I was speaking with a client who asked me, “Dan, Do I Need a Living Trust?” Well … get ready for the typical lawyer answer … “It Depends.” The reason it always depends is that every family’s situation is unique and different. Every family that I speak with will have their own concerns, their own wishes, and their own goals when it comes to planning their legacy and planning their estates.
For instance, a family may have the following concerns, wishes or goals:
- Some Families May Be Concerned About Nursing Home Cost and Long-Term Care Cost Diminishing the Value of Their Assets
- Some Families May Be in a Second Marriage and Have Concerns About How to Distribute Their Assets Fairly and Avoid Disinheriting Each Other’s Separate Children
- Some Families May Be Concerned About Their Adult Children Spending Through Their Inheritance Too Quickly (The Average Inheritance Is Spent in 17 Months)
- Some Families May Be Concerned About Their Adult Children Losing Their Inheritance Due to Creditors, Lawsuits, and Other Irresponsible Behavior
- Some Families May Be Concerned About How to Protect Their Adult Children From a Bad Spouse (Current or Future), and Family Money Going Out of Their Bloodline
- Some Families May Be Concerned About Potential Lengthy Court Delays, and Exposing the Family Personal Assets to the Public
- Some Families May Be Concerned About Taxes (Estate Taxes Are Just One Type of Tax That May Impact Your Estate and Legacy Planning)
So, do you need a living trust? Well, that answer is going to be different for everybody. However, there are some things to watch out for when making the decision whether you need a living trust or not.
First, a living trust is not for everyone. I have seen attorneys and sales people tout living trusts as something everyone needs. However, depending upon your family goals, concerns, needs, and wishes, a living trust may not be the right legal strategy for you.
Second, beware of the living trust mills! This is a term that has been used around the country to describe the selling of estate planning legal services through high-pressure sales techniques. The process often involves a Free Dinner Seminar and the business model is focused on high volume. Often, the estate planning documents are “one-size fits all” and is being used as a precursor to sell financial services products.
Estate planning is not “one-size fits all” and is focused on the family’s individual needs, wishes, goals, and concerns. There is nothing wrong with attending estate planning seminars and workshops, after all, we host workshops and seminars too! However, make sure the workshop you are attending, and more importantly, the law firm that you choose to work with, is employed with competent and experienced estate planning attorneys. In living trust mills where non-attorneys are selling you on the concept of living trusts, the actual trust documents are typically produced by attorneys in other states and will not be there with you to explain the legal concepts that apply to your specific situation. In these situations, you may have bought nothing more than a very expensive ream of paper.
Finally, when deciding whether a living trust is appropriate for you and your family, seek the advice of an attorney that you are comfortable with and answers all of your questions regarding living trusts and estate planning. When I sit down with clients, I normally lay out at least two, but usually three options when it comes to their estate planning. Ultimately, the client, as it should be, is going to be picking the plan, and the fee, that make most sense for their family.
When selecting the law firm and attorney to represent you and your family through the estate planning process, make sure this is the attorney that your family will be comfortable calling on the day that you pass away. This is the attorney that will hold their hand and guide them through this process and ensure that everything was handled just as you had planned.
Contact your Nashville, Tennessee Estate Planning Attorneys today at (615) 472-2482 to schedule an estate and legacy planning strategy session.