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In my work I have many financial conversations. In such conversations, a family will often show me a thick binder that contains their trust. Sometimes they cannot explain why they purchased it. They are confused.
When I examine these binders they often contain one-size-fits-all trusts produced by "trust mills." A trust mill is a sales organization that markets trusts. An attorney is typically involved, but has little or no actual contact with the client.
Families usually buy a trust from a trust mill because a salesperson disturbs them about "probate" and offers relief in the form of a trust. After the sale, an administrative assistant enters the family's information, hits the print button, and puts the documents into the impressive-looking binder for presentation to the client.
The results can be alarming. In the last few years I have discovered:
Trust mills succeed because people are confused about trusts, which presents an opportunity for ill-informed or overly ambitious salespersons. They latch on to ignorance surrounding the unpleasant topic of death.
In reality, the concept of a trust is easy to understand. It is simply a legal arrangement for taking care of the things you own.
A trusted individual takes care of something for the benefit of someone else. Or, more precisely, a person (Grantor) grants something of value to a trustworthy person (Trustee) who holds and manages it for the benefit of a person (Beneficiary).
As an example, if Dad gives property to Son to care for until Son gives the property to Grandchild, a trust has been created.
A trust arrangement is often created during life to make an estate easier to administer after death. Sometimes it can reduce final legal and probate costs. However, it could also make the estate more easily mishandled, since there is no court oversight.
So who should you trust about a trust--a trust mill salesman or your local attorney? The answer? Go local. You might still end up with a trust (usually at a fraction of the cost) if it fits into your goals.
Your local estate planning attorney will take the time to become acquainted with your specific situation. This gives you the peace of mind that the planning documents will actually work when the need arises.
Families go through real trials when a death occurs. It's comforting to know that your loved ones will be able to go to a local source for dependable counsel during such a trying time.
Planning is so much more than buying a one-size-fits-all product from a trust mill representative. Do your planning in a way that provides documents that work and allows loved ones to get dependable, local counsel when the inevitable finally happens.