Can You Set Up A Trust Without An Attorney?

Dan McKenzie • May 17, 2023

When people think of a trust, they might imagine a heavy and intimidating legal document. The truth is a trust is simply a relationship in which one person, known as the grantor, gives another the right to hold title to specific assets for the benefit of someone else. A trust can be as simple or comprehensive as the situation requires.


Some U.S. states even allow oral trusts, which means the trust can exist simply by the understanding of the parties without having anything written down. The dangers of such an arrangement should be obvious. Most seasoned attorneys have plenty of horror stories about well-intentioned laypersons trying to do their own court filings or other legal work.


As we will discuss in this article, just because it is possible to create trust on your own does not mean it makes sense to do so.


In straightforward cases, a person with no legal background can create a trust using legal drafting software or standardized forms. If you plan on taking the do-it-yourself approach to estate planning, expect to spend some time researching to ensure you are on the right track.


There is a lot of information available in legal books, online resources, sample documents, and even services that sell blank trust forms that need to be completed with personal information. If your situation is straightforward or commonplace, you might find a standard form that fits your needs.


You will need to take inventory of your assets, determine the correct type of trust form to use, and decide who should act as trustee. Most importantly, you must evaluate your situation carefully to ensure you are not missing contingencies or leaving anything out of your plan.


There are many cases where professional counsel is almost always required. If your net worth is close to the estate tax exemption, your heirs could benefit significantly from estate tax planning.


Otherwise, if you have a special needs child, want your estate to be distributed in some way other than a single, outright distribution, or would like help funding the trust, then working with a professional is certainly advisable.


Even for more straightforward matters, working with an estate planning attorney can give you the peace of mind that you have an expertly drafted estate plan and a helpful resource for all your questions.


WHAT ARE THE BENEFITS OF PUTTING YOUR HOME IN A TRUST?

A trust can only control assets that are contributed to the trust, also known as “funding” the trust. You can have a professionally drafted trust by the best attorneys in the country, but if assets are never placed in it, the document will be essentially useless.


When considering funding a trust, people usually wonder about their home since it is often their most important asset. The main reason to place your home in trust is to allow your family to inherit the house without going through the lengthy and expensive probate court process. If a trust holds the home, it can be transferred to the beneficiaries privately and without court involvement after the grantor dies.


Another critical reason to consider having your home held in trust is to plan for incapacity. A revocable living trust should include a successor trustee responsible for managing any trust assets after the grantor cannot do so.


In case of incapacity, the new trustee would step in to manage and care for the trust assets. Without a trust in place, a family member would need to petition a court to appoint a guardian with the authority to manage an incapacitated person’s financial matters. This process is known as a conservatorship and is almost always best avoided.


If you are working with an estate planning or real estate professional, placing a house in trust should be straightforward. If you use a revocable living trust to hold title to your home, you remain entirely in control of the house and can sell or gift the property as if it were your own.


There are no changes to your property taxes or mortgage payments, and you can even cancel the trust in the future if you change your mind or circumstances change.


CAN YOU PUT YOUR HOUSE IN A TRUST WITHOUT AN ATTORNEY?

You must also oversee the funding process if you are drafting your trust. The funding process can sometimes take more time and energy than preparing the trust. In the case of real estate, ownership is determined by public records kept in the county where the property is located.


The legal document representing ownership of real estate is called a deed. As with other legal documents, numerous resources online and elsewhere discuss deeds and even provide blank deed forms to be filled by the parties.


A real property owner can always transfer a deed to another person without going through a lawyer or real estate professional. First, you will need a copy of your original deed. If you do not have your original deed, you can obtain a copy from the recorder of deeds in the county where the property is located.


For any real estate transaction, you must determine what type of deed is required, as there are quitclaim deeds, general warranty deeds, bargain and sale deeds, beneficiary deeds, etc. Next, you must select the appropriate deed form for the county and state.


Deeds are subject to formal requirements established by each state’s regulations. It is essential to follow these requirements to ensure the county’s clerk and recorder accept the deed and to help avert any legal issues later. A deed must identify the property being transferred.


The address, legal description, and parcel identification number of the property must be copied carefully from the original deed since even a tiny typo could cause problems with the chain of title. The deed must include the date, the parties to the transaction, and the proper legal language, such as words of conveyance and consideration.


Deeds can appear as relatively simple legal documents, often only one or two pages long but full of detailed information. Due to the complexity and potential consequences caused by recording an erroneous deed, it is generally advisable to consult with an attorney or real estate professional before moving forward with a real estate transaction, even if it is only to transfer a home to a revocable living trust.


DISADVANTAGES OF NOT HIRING A LAWYER

The main disadvantage of not hiring an attorney is that there is simply no guarantee the documents will be effective. Unfortunately, we have seen mistakes or inconsistencies even in straightforward wills drafted using standard forms without professional assistance.


Documents prepared using forms or templates often come with instructions that must be followed carefully to avoid ambiguities. Since these documents are usually only found or examined by attorneys after the author has passed away, there are no more opportunities to ask what was intended or what any unclear language could mean.


Such documents often end up at the discretion of a probate judge, making the legal process lengthier and more expensive. Having professionally drafted and comprehensive estate planning documents can help prevent ambiguities and conflicts.


Another common drawback of the do-it-yourself approach to estate planning is that trusts are often not funded. As mentioned above, a trust only works with the assets transferred to it.


Often, grantors are unaware of or forget about the funding; they keep putting it off or are confused about what assets should go into the trust or how to re-title them. The result is that trusts are either never funded or only partially funded. The trust might not have enough assets to carry out its intended purpose, and any assets left outside the trust might need to go through probate.


When you work with The McKenzie Law Firm, you can be confident that you have a reliable resource to help ensure your estate plan is prepared and ready to implement. If questions arise during the funding process, you also have an experienced team to help you.


IS IT EXPENSIVE TO CREATE A TRUST WITH AN ATTORNEY?

Hiring an attorney to help with your estate plan can usually cost between one and several thousand dollars, depending on your needs and the complexity of your wishes. People with non-taxable estates, currently nearly $13 million for individuals and $26 million for married couples, can expect fees towards the lower end of the spectrum.


Often, people who believe they will save a lot of money by drafting their legal documents are surprised to learn that working with an attorney is not as expensive as expected. This is especially so when you consider the costs of getting the correct information and tools needed and the risks involved for any mistakes made along the way.


It is also essential to remember that the legal fees cover not just the necessary legal documents but a professional evaluation of your family’s situation to ensure you have a plan that meets your goals and needs.


If you are considering drafting your trust or other estate planning documents or seeking guidance with this process, consider calling The McKenzie Law Firm. Initial consultations with an experienced attorney will allow you to discuss your situation. Find out whether working with an attorney makes sense for you by contacting us today.


What Next?

If you think it might be time to think through your estate plan, you can:


  1. Call us at 720-821-7604 to schedule an "Attorney Evaluation Session" to determine whether our firm would fit your needs well. Or fill out our contact form to have us call you.
  2. Visit our estate planning page to learn how proactively thinking through your estate plan can protect you and your family, minimize hassle, lower the chance of family discord, and minimize or eliminate taxes.
  3. Learn more by reading our blog or watching our videos.

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