California Living Trusts: How to create a Living Trust?

When creating a California living trust there are certain things you should know. First of all the State Bar of California warns consumers to watch out for Do-It-Yourself living trust books, forms, and software services. That's because without an experienced attorney to help a person properly navigate the process, the simple forms usually provided by California Do-It-Yourself services can and oftentimes do lead to mistakes. Instead, the State Bar suggests that a person probably ought to think of California DIY trust services as good starting places to learn about creating an estate plan but shouldn't rely upon them to competently draft their own living trust.

In addition, the California State Bar warns that many of those promoting estate planning and living trusts, really are in it to sell life insurance, annuities, or some other financial product that pays them a large commission. In the process they might help a consumer get into some type of trust but the price one pays might be dear not only in dollars but possibly also in "questionable" legal documents with lifelong unfavorable ramifications.

On the other hand, many consumers understandably are concerned about overpaying for a living trust in California. And indeed, attorney pricing can be a tricky thing here. For instance, the location of a law firm's office might be a huge determinant in the price you pay for a Living Trust. A firm in Beverly Hills for example, is likely to charge substantially more for a living trust when compared to a firm in Valencia, California. Plus, some California law firms charge large fees for performing what in many cases is a relatively routine service. What kind of fees am I talking about? Well, a friend of a friend of mine just informed me that they paid over $100,000 for their estate plan at a Century City law firm. While that might be an isolated case, I know other California attorneys who commonly charge $10,000, $15,000, or more for a living trust package. Despite the fact that there is a ton of overhead to pay for, when running a law practice in California, only the most complicated of family dynamics and wealth could ever possibly justify such exorbitant fees, in my opinion. Which is not to say that the consumer/client is not getting anything in return. They are indeed most of the time getting a hand-crafted personal estate plan, with the added bonus and security of a lot of hand holding, gourmet cappuccinos, and fancy estate planning binders. At the end of the day though, these clients are paying a huge price for the VIP treatment.

To make matters even more complicated though, there are plenty of California attorneys who just dabble in estate planning, along with lots of other unrelated practice areas. Perhaps, these lawyers are truly skilled practitioners, but as the old sayings goes: the jack of all trades, are masters of none. And with California lawyers, I've found that this old saying really holds true.

Moreover, it's no surprise to the many trust and estates attorneys in California who do focus their practice on this area of the law that there has recently been a veritable explosion of trust litigation cases. And it looks like it's only going to get worse. Putting off planning as well as shoddy planning, makes it probable that baby boomers and seniors will keep the litigation end of trusts and estates businesses flourish for decades to come in California. Of course, the person(s) who did no planning or did poor planning will never know about it because they'll be gone. Naturally it will be too late at that point to make things "right." Instead, their loved ones will pay the price and be the future victims of a well intended but ill-fated plan, or lack of one.

So after having read all that, you're probably wondering what's the best way a California consumer can go about creating a competent package of estate planning and living trust documents that will protect them and their loved ones. Well here are a few suggestions that should help:

1) Look for an experienced California attorney that limits their legal practice to estate planning, probate, and elder law;

2) Know that unless you have an extremely complicated set of circumstances within your family or have a net worth above $5,540,000, most competent California living trust packages (in 2015) from experienced estate planning attorneys usually costs somewhere between $2,000 and $3,500 by the time all is said and done; and

3) By all means, ask for references from other Californians who have used that attorney's services.

The general advice directly above is the best way for Californians to go about creating a competent and tailored package of living trust estate planning documents, without overpaying for the services and while also leaving a lasting, fulfilling legacy for their loved ones.

It appears that CA DIY Trust Services usually provide reviews of their documents but only checking for spelling, grammar, and inconsistencies. Since the review is not performed by an attorney, there is no way of knowing whether the trust created is proper or if a major legal error has been committed. And actually, so far I can see, since no attorney prepares any of these trusts, it is 100% CERTAIN THAT SOME (OR MANY) OF THESE TRUST PACKAGES WILL FAIL. When I say it will fail, it means that distributions will not go the way you want, assets will get wasted by spendthrift children, opportunities for creditor protection will be lost, negative tax ramifications will occur, disputes will erupt after you pass away between family members or creditors and loved ones, costly and time consuming guardianship or conservatorship proceedings will be needed, and/or many other possible negative outcomes. I've also noticed that there are many lawsuits against DIY companies FOR MISTAKES THAT HAVE BEEN MADE IN THE PAST. Please verify for yourself and do your own google search for such words as "Legal zoom complaints" to see such first hand. (2015 Update-Please note that as of 2015, no one knows about any successful lawsuits against Legalzoom, Nolo, etc. for mistakes made. There are likely several reasons for this. For example: 1) Ironclad disclaimers on these websites, 2) Reluctance by the grieving to spend lots of time and money on a fruitless lawsuit over mistakes-mostly because of those disclaimers, 3) A few people have sued and settlements were made with the stipulation that confidentiality be retained, 4) Lawyers make a good living off of fixing spoiled estate plans and/or litigating over poor plans.)

THE BIGGEST PROBLEM WITH DIY WILLS AND TRUSTS IS THAT NO ONE WILL KNOW ABOUT MISTAKES UNTIL YOU PASS AWAY AND YOUR LOVED ONES ARE FORCED TO PICK UP THE PIECES AND FIX ANY PROBLEMS OR MISTAKES THAT WERE MADE.

• You're in a second marriage (or third or fourth...)
• You have children from a prior relationship
• You own a business (or part of a business)
• Your assets total over $5,430,000
• You are recently divorced
• You have a child with special needs
• You have a disabled family member
• You have minor children and you want assets preserved for them beyond the age of 18
• You want to make charitable gifts
• You have substantial assets in an IRA, 401k, or other retirement vehicles
• You anticipate a large inheritance from someone else
• You own real estate in more than one state
• Members of your family have a history of not getting along
• People who you are thinking of putting in control of your affairs, have their own financial problems or a history of financial problems
• You are concerned about preserving your assets for yourself or loved ones, in the event you or your spouse will need long term nursing care
• You have adult children with saving or spending issues
• You are worried about your child's spouse winding up with your child's inheritance in the event of divorce
• Other Non-Plain Vanilla Circumstances Exist In Your Particular Situation