Balancing everyday expenses with the investment needed to create a solid estate plan can have you facing hard decisions. You may need skilled guidance when it comes to protecting your assets, but can you set up a trust without an attorney? While it’s possible to do so, you need to examine all your options, especially if you have significant assets or might need long-term health care.
In this post, learn from a Massachusetts estate planning attorney about what’s required to create a trust both with and without a lawyer’s help, as well as common mistakes you can avoid if you set up a trust on your own.
What Are Your Options for Setting Up a Trust Without an Attorney?
Trusts are a vital part of many estate plans, since they create legal entities that can hold and manage property separate from you as an individual. Trusts can increase the value of their assets, decrease tax burdens, and speed property transfer to your heirs. When you create a trust, you serve as the grantor and assign a trustee, who then administers the trust and distributes assets to its beneficiaries.
These are the most common kinds of trusts used in Massachusetts:
- Revocable living trust: You can choose to change or dissolve this trust after you’ve created it and can serve as the trustee.
- Irrevocable trust: You name someone else as the trustee and can’t change them once they’re established.
- Testamentary trust: You create a testamentary trust as part of your will, and it only goes into effect after you die.
Trusts may help you provide for children with special needs, support your spouse after you pass away, or minimize estate tax obligations. To ensure they work the way you intend, you must prepare the documents correctly and according to state law. Let’s examine some ways you can do this without an attorney.
Online Legal Platforms and DIY Forms
There are numerous online legal platforms that offer DIY estate plans for wills, powers of attorney, and trusts. The cost is much lower than working with a law firm, making them attractive if you don’t have a large estate. You provide the requested information, print the pages, then sign and notarize them. However, you have no guarantee that the website information or forms are the most current for Massachusetts, and errors could invalidate your DIY trust.
Using Basic Trust Templates
Another choice involves using basic trust templates that help you draft the trust document on your own computer. It should include information naming the grantor (usually you), your trustee, and beneficiaries. You must also name and transfer assets to the trust to fund it.
Once you have completed your document, you should research to verify that it complies with the Massachusetts Uniform Trust Code (MUTC). For example, if you place real estate into the trust, you must record the transfer with the registry of deeds under MGL Part II Title II Chapter 203. Finally, you must sign the trust document in the presence of a notary public.
Handwritten or Self-Drafted Trusts
While it’s possible to hand-write a trust, this is a concern since Massachusetts law doesn’t recognize self-drafted wills. It’s likely that a court may invalidate handwritten trust documents, which outside parties could easily alter after you pass away. Trust beneficiaries may also claim that others had undue influence when you wrote the trust terms.
Additionally, banks and other financial institutions may be reluctant to accept a self-drafted trust document. This could make it hard for the trustee to assume their responsibilities and delay fund and property transfers to beneficiaries.
What Are the Risks of Setting Up a Trust Without an Attorney?
Creating a trust without an attorney leaves you open to numerous problems, which can render the trust invalid. Unfortunately, this can mean your heirs must deal with the fallout after you’re already gone. Here’s what might go wrong when you try to establish a trust without legal guidance:
- You choose a trustee who’s ineligible: Under MGL c. 190B, § 1-201, trustees must be at least 18 and of sound mind.
- Your trustee is not trustworthy: Under the Massachusetts Uniform Trust Code (MUTC), Chapter 203E, trustees must be “prudent investors” and protect the trust’s value. An unreliable individual may put their interests ahead of the trust’s, resulting in legal action from beneficiaries.
- You fail to name a successor trustee: In living trusts, you serve as the trustee during your lifetime, but you must name someone to take over when you die. Likewise, irrevocable trusts should have a successor in case the first trustee can’t serve in the role.
- You don’t fund the trust correctly: You must transfer ownership of real estate and financial accounts properly, or those assets may remain your personal property. This negates one goal of a trust, which is to avoid probate.
- You create the wrong type of trust: If you use the wrong kind of language and attempt to create a living trust but actually establish an irrevocable trust, you lose the ability to change the trust. You can also trigger unexpected tax concerns for yourself or your heirs.
- You don’t declare your intention: Under MGL c. 203E, § 402, you must indicate your intention to create the trust in a way that a court can validate, usually through a written document presented by the trustee (MGL c.203E § 1013).
By working with an estate planning attorney, you can avoid many of these obstacles and get the outcome you want.
When It’s Especially Important to Work With a Trust Attorney
There are several situations when you will find it worth the investment to hire a trust attorney to help you set up a trust, including the following:
- You have multiple high-value assets: If you own several homes or pieces of real estate, have a business, or control significant funds, you must structure your estate plan and trusts carefully to avoid probate and minimize federal estate taxes for your heirs.
- Your family dynamics are complex: Second marriages and children with special needs mean you must clearly define how to distribute assets when you set up a trust.
- Creditors may file claims against your estate: Trusts can safeguard your family’s inheritance against credit collection attempts or lawsuits.
- You experience life changes: Marriage, divorce, and adding children to your family can rearrange your priorities for funding the trust you created when you were younger. You may wish to name new trustees or add beneficiaries, and a trust attorney can help you amend the trust terms as needed.
An estate planning lawyer can customize your documents to meet your goals better than a website or computer program. They will tailor your trust terms to match current Massachusetts law and guide you if new legislation passes that could impact your estate plan.
How Cohen Cleary Can Help You Create a Strong, Enforceable Trust
At Cohen Cleary, P.C., our attorneys can help you build a legally binding and enforceable estate plan that will serve you and your family well. We help you understand trusts and common issues you may face so you can make informed choices about how to proceed. We offer the following services:
- Creating an inventory of your assets
- Determining which assets should go into your trust
- Deciding whether to put your house in a trust
- Choosing your trustee
- Clarifying the trust terms
- Transferring real estate deeds, vehicle titles, and other assets
- Naming and excluding beneficiaries
- Creating a will that establishes a testamentary trust
Our team strives to build a relationship with you that goes beyond drafting and filing estate documents. We can assist you with changing your trust requirements when you start or sell a business, gain new property, or build wealth. As your family or health changes, we can adjust your estate plan to address those. Arrange a consultation with an experienced Massachusetts trust attorney when you contact us today.
