The Living Trust Advisor. Condon Jeffrey L.

a decade after my father conducted his first seminar, Living Trust seminars became ubiquitous. They were seemingly everywhere, offered by attorneys, insurance companies, real estate firms, banks, and brokerage firms. You could not open your newspaper or mailbox without receiving a solicitation to attend one.

      In the 1990s, the market for the Living Trust business had become farmed out. It was dog-eat-dog for the same potential pool of clients. Living Trusts became so cheap that reputable attorneys advertised their Living Trust services for as low as $499.

      You get what you pay for in this world of ours, and the Living Trust consumer often experienced firsthand that old adage. Some Living Trust attorneys offered a good price, but at the expense of customer service. Practices became about volume. People never met the attorney who purportedly prepared their document. Instead, they saw paralegals who rushed them through the draft reviews. People felt like numbers instead of clients, and were too cowed by the manic process to ask questions. Ultimately, they signed their Living Trust without any meaningful understanding of the effect and function of the document and were politely shown the door. Next!

      At his seminars, my father consistently gave what I believe, in my less-than-objective opinion, was the best presentation on the Living Trust since the world was a ball of molten lava. But the Living Trust world had changed, and we had to change with it. The client base for Living Trust business had been tapped out, and people were weary of being bombarded with flyers, advertisements, and seminar invitations for low-cost Living Trusts.

      As a result, our Living Trust seminars became “Family Inheritance Planning” seminars. Instead of talking about Living Trust mechanics, we focused on the human side of inheritances, such as how your children can share an inheritance when they could not even share their toys, and how you can prevent your surviving spouse from losing control of her money and property if the children are grasping for an early inheritance. Eventually, this new emphasis on the human and personal element in the inheritance arena comprised the theme of the first book my father and I co-wrote in 1996, Beyond the Grave: The Right Way and the Wrong Way of Leaving Money to Your Children (and Others), which has since become the most widely distributed inheritance planning book in American publishing history.

Financial Advisor Alert

      In connection with the marketing of the book, my father and I appeared on more than 100 radio talk shows throughout the United States, where we answered hundreds of questions from listeners about a wide range of inheritance planning issues – from succession of the family business, to protecting a widow from her own children grasping for an early inheritance, to leaving money to the family dog. Yet, of all the questions asked by callers, 90 percent of them were about the basics of the Living Trust. What is it? How does it work? What does it do? Why should I have one? What happens to it after I die? Where should I keep it? Why does it have so many pages? Moreover, these questions were asked by callers who informed us that they have Living Trusts that were prepared by lawyers!

      So.. consider presenting an inheritance planning seminar for your present and prospective clients with an experienced trusts and estates attorney as the guest speaker. By doing so, you will provide yourself with the opportunity to press the flesh and enhance your reputation as one who takes the time to make available information that the attendees will find absolutely invaluable.

      I have been conducting Family Inheritance Planning seminars on my own for about 15 years. Although my style is certainly more freewheeling than my father’s horse-sense suffer-no-fools approach, I proudly walk in his footsteps to offer invaluable information about family inheritance planning to audiences around the country. And as they did years ago, folks come up to me after my talks with their Living Trusts in hand, pointing to certain pages and asking me, “What the hell does this mean?”

      And if you think there is a lot of ignorance out there with lawyer-drafted Living Trusts, don’t get me started on the misconceptions and misinformation that arise in Living Trusts that are prepared without lawyers.

      Too late! You got me started!

      The Self-Drafted Living Trust – Don’t Do It!

      This book’s title may have given you the impression that I am going to tell you how to establish your Living Trust on your own – without having to pay for a lawyer.

      I hope I did not get your hopes up. This is not a “how to become your own lawyer” book. You would never consider being your own doctor. Why would you even think about being your own lawyer?

      Certainly, taking the lawyer out of the process probably sounds pretty good to you. After all, if you are like most people, you have never before met with a lawyer, because, quite simply, you never had to. You have never been sued or divorced. You have never sued anyone. You have never been charged with a crime. You have not set up a corporation or partnership or engaged in a complex business transaction.

      Indeed, you may have gone almost your entire life without the need to consult with a lawyer. I said “almost,” because now you face the prospect of an inheritance document that, while simple in concept, can be quite daunting to construct. If you have seen a Living Trust before, you have found that they are somewhat lengthy. In my office, the typical Living Trust is 50 pages long.

      But even though your head says you need a lawyer to help you through the minefield, your heart may be urging you to do it alone. Why? Because you have heard the lawyer horror stories from your family, friends, and co-workers. “My lawyer charges too much.” “My lawyer never returns my calls.” “I paid my lawyer a retainer months ago, and I haven’t seen any documents yet.” And on and on.

      Of course, there is nothing to stop you from giving it the old college try. In fact, you will find a lot of help. There are a host of how-to books, software programs, and stationery forms, replete with terms and provisions that you can pick and choose to incorporate into your own Living Trust.

      In all my years as an inheritance-planning lawyer, I have met with hundreds of do-it-yourselfers who have paid me a fee to review their efforts. Yes, that does sound inconsistent. Why would they want to pay me a fee to review their self-drafted Living Trusts when their main goal was to avoid paying me a fee in the first place? Their answers were universally the same: “I just wanted to be sure that everything is legal.”

      Let me tell you something, and please consider this your first piece of my advice. If you prepare your own Living Trust, it will be wrong in some way, shape, or form.

      Maybe it will be a harmless error, such as explaining estate tax concepts with outdated language. Does your Living Trust use the term A-B Trust to incorporate the plan of preserving the deceased spouse’s applicable exclusion amount? That is the right concept, but the wrong words. The use of the wrong language will not be fatal to that tax-saving plan, but the Living Trust is, technically, still wrong.

      Maybe the mistake will be overkill. Several times a year, I review self-drafted Living Trusts that contain complex tax-reduction plans that would be appropriate only for the heads of Fortune 500 companies. But the persons who drafted those Living Trusts are nowhere near that wealth category. If those persons die with those plans in place, their beneficiaries will be stuck in a morass of expensive and unnecessary processes.

      Maybe the mistake will be fatal to your children. One man came into my office explaining that his son was a drug addict. After reviewing the Living Trust he prepared with the help of the Trustmaker software program, I said to him with all the sarcasm I could muster: “Why does your Living Trust leave your drug-addicted son his inheritance share outright and under his full control? The second he gets his inheritance, he’s going to turn it over to his pusher!”

      After having reviewed hundreds of self-attempted Living Trusts, I have never seen one that has been correct, complete, or appropriate for the circumstances. It doesn’t matter how smart you are, and what you do for a living is irrelevant (unless you are an inheritance planning attorney). There are too many subtleties and intricacies concerning your inheritance instructions in the Living Trust that the how-to books just don’t pick up. You don’t realize this because, in a circular bit of reasoning, the how-to books have not made you aware of them. In other words, you don’t know what you don’t know.

Financial Advisor Alert

      When your clients