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August 2020

California Living Trust creation: should you do it yourself?

Estate planning: Do-it-yourself versus seeking experienced legal advice

If you are considering a DIY California Living Trust creation service or software, please read this article before doing anything.

It is only in the last 13 years or so that the first online service for the creation of legal documents appeared. Since that time various websites and software have popped up all over the web. There is a lot of money to be made for these businesses that can use legal boilerplate to mass produce legal documents to the public. But the question remains, is it a good idea to utilize a California Estate Planning creation kit or website?

The main distinctions between an attorney and a DIY website

Drafted by an Attorney

There is a huge distinction between do it yourself estate planning and an estate plan created by an attorney. The California estate planning lawyers at the Law Offices of Jack B. Friedell have drafted over a thousand estate plans. In doing so, we have dealt with a wide range of clients with countless nuances pertaining to family, health and finances. The knowledge and wisdom that this experience brings is priceless.

No DIY website or software can come close to providing its users with the same education. However, that does not stop the websites and software creators from making claims that with just a little effort you can educate yourself on the main points of a solid estate plan. Of course, these same sites back that claim up with a disclaimer to any liability that the company’s do-it-yourself software may cause. Don’t be fooled; there is a reason these sites are riddled with disclaimers.

How much time did your attorney take with you?

This is an important question to consider. The reason this is important is because there are various associations out there where you pay a membership fee to have access to a network of attorneys. By paying the association dues you receive a huge discount on the cost of legal services. But here is the problem. The attorney you are speaking with (typically over the phone) will spend on average about 20 minutes with you. For some people this might be a sufficient amount of time. However, unless you are a turn key family with no desire to do anything other than avoid probate chances are you need to have an in depth conversation with your estate planning attorney to really get to the heart of matter. Unfortunately, that is not what you will receive for your discounted membership price. Instead, you will get a cookie cutter estate plan that was put together over a 20 minute phone call.

Poignant Questions

When you first visit the Law Offices of Jack B. Friedell for a free consultation of your California Estate Planning needs you will notice that we do not rush our clients. Instead, we sit down with our clients and educate them on the estate planning process. We talk over the various documents in a typical estate plan such as a Living Trust, a Will, a Power of Attorney, and an Advance Health Care Directive. We highlight key areas of each, uniting our client’s desires and needs with the specific document that incorporates that desire and need.

Further, for clients with sizable estates looking to avoid estate taxes or for clients seeking to provide for a new spouse, we offer valuable solutions in the form of more advanced estate planning tools such as AB or QTIP trusts, Irrevocable Life Insurance Trusts, Qualified Personal Residence Trusts and Qualified Terminable Interest Property Trusts.

In contrast, DIY trust and will creation websites and software ask the same specific questions to every individual. Any follow up questions are pre-programmed into the software. There is no personal touch whereby an experienced attorney guides you through the various nuances of your specific estate plan based on your specific desire and needs.

The reality is, most people don’t know the right questions to ask when it comes to formulating an estate plan. Even worse, most people don’t know the consequences of choosing a do it yourself estate plan compared to having an attorney prepare your plan. The number one consequence is the high cost of correcting any errors or having your estate go through the probate process because your trust was not properly funded.

Do you really save that much money?

Consider this: in California your home is valued at the fair market value and not the net value (FMV minus your mortgage). The threshold for probate in California is $150,000. That means any homeowner with a home valued at $150,000 or more will have their estate probated when both spouses die if the home is not in a California living trust. An estate worth $150,000 will pay $5,500 in probate fees alone. Therefore, doesn’t it make sense to pay the few hundred dollars more now for a proper California estate plan than roll the dice and hope your DIY living trust you prepared through a kit or website was done correctly?

And for those California residents who only have a Will, please note that a Will does not avoid probate in California. A Will is a road map for the court on how you want your assets distributed upon your death. All California estates with or without a Will must pass through probate if the estate is valued over $150,000. Therefore, if all you have is a Will and you have assets above $150,000, you need to consider creating a living trust.

The bottom line is this: paying an attorney between $1,000 to $3,000 for a rock solid estate plan is pennies on the dollar compared to doing it incorrectly and having your entire estate probated. A typical probate will consumer about 4-6% of your total estate in court costs, legal fees, appraisal fees, CPA fees, etc…That means for an estate valued at $1,000,000, the total fees associated with having to go through probate could be between $40,000-$60,000.

Help With Funding Your Trust

A trust is only as good as the assets that are inside the trust. Failure to properly fund your trust can cause all sorts of problems, with the most painful being that your estate is forced to go through a costly California probate. At the Law Offices of Jack B. Friedell, we help guide our clients through the funding of their trust. We will even talk to the various financial institutions on our clients behalf if necessary. We go the extra mile for our clients. No do it yourself estate plan will provide this level of service to make sure your trust is properly funded.

Free Follow-Up Consultation

Finally, another difference between the Law Offices of Jack B. Friedell and the various DIY Will and Trust companies is that we offer a lifetime free follow-up consultation. Once we have worked with you to create your estate plan we welcome our clients to call with future questions. We also offer periodical free consultations to see if your documents align with your current needs. Estate planning for us is not a onetime affair but a lifelong relationship. No online trust creation service offers this type of personal attention and level of care.

Finally, if cost is an issue please ask us about our estate planning payment plans.

Familiarize yourself with the ins and outs of estate planning here.

The authors, publisher and host are not providing legal, accounting, or specific advice to your situation.