Any significant asset can be threatened by creditors, predators, and major relationship shifts like divorce. A good trust will take into account the highly specific dangers faced by your circumstances—both during your life, and when you’ve passed that asset on to your heirs.

Suppose you own an apartment building and you have hired somebody to manage it. When you die, you pass the apartment building on to your child, outright.

One day, long after you are gone, the apartment manager says something stupid to a prospective tenant like, “We don’t rent to people like you.” (Feel free to insert any protected class for the word “people.”) The prospective tenant sues your child, even though he or she never hired the manager, and like you, never instructed the idiot to say any such thing. If the lawsuit is based on race, disability, or similar protected circumstances, then your child will probably not be covered by insurance.

I could come up with any number of similar examples where people do things that are not your family’s fault, but trigger legal responsibility.

A savvy estate attorney can structure a series of trusts so when you die, instead of your child inheriting the apartment building outright, it goes from your bucket into a second bucket. Your child did not create that second bucket—you were the grantor of the asset in that bucket, and you are gone. Your child can now control and benefit from the apartment building, but he or she can be shielded from the threats of creditors, predators, and lawsuits. This same strategy can ensure that your child does not lose such assets in a divorce. Again, because your child does not technically own the asset, it is owned by an irrevocable trust “bucket.”

We’ll learn more about predators, creditors, and divorce in Mistake #6: Letting Third Parties Take Advantage of Your Beneficiaries.

In the ever-expanding universe of trusts, you will find trusts which pour from one bucket to the next, trusts within trusts, and many kinds of children’s trusts. Each must be carefully coordinated with your overall estate plan. And just to repeat, none are “generic.”


You can, for example, set up a trust for the benefit of your children into which other relatives can place money. Suppose both sets of grandparents are interested in using their annual gift-tax exemption to help their grandkids save for college. Such a trust would not technically be considered a “living trust,” but could go a long way toward funding your children’s education.

Even a basic living trust to benefit your children must be carefully considered from every angle. For example, as I have discussed (see Mistake #10), you may not want your living trust to read simply: “When the kid is eighteen, he gets it all.”

Or, even when he’s twenty-five. You may sit down with your estate attorney and say, “Gee, my kid is twenty-five and still lives at home. He sits on the couch all day smoking dope and playing video games. Already this drives me crazy. At least, if I die tomorrow, I don’t want to go on supporting that lifestyle. Maybe I could just give him a little bit each year, but not quite enough to live on, so he’ll have to go out and get a job?”

With a properly written living trust, controlled by a separate trustee, you can indeed make that specific kind of provision to help your child move forward after you are gone. But you cannot download a template from the Internet and make that kind of provision. You can’t fill out an online form, which will make that work.


Now that you realize how a personalized living trust, along with other kinds of trusts require some serious expertise, how do you go about finding that expertise? In the Introduction, I explained some tells for identifying a good estate attorney. But the best attorneys don’t just learn by doing estate planning. Before anyone can create a really workable and airtight plan, he or she must thoroughly understand what happens after that plan is triggered.

When my firm trains lawyers in estate planning, we don’t start by teaching them how to meet with clients and draw up trusts. We start by teaching them about the probate process, the conservatorship process (see Mistake #8), and trust administration. We get them directly involved in the events which follow the death of a client. That way, they see how the crucial decisions made during planning play out in the real world.

Lights go on for these lawyers: “Gee, if this couple had just added a provision for care of Uncle Ted to their living trust, all this hassle for their heirs could have been avoided.” Or, “I wish someone had told these people not to name these particular two people as co-trustees. As a result, this brother and sister have really come to hate each other.” Or, just as commonly, “Gee, if this couple had come back every five or six years and reviewed their estate plan, everything would be working a heck of a lot better. So much changed in the thirty years before they died that it’s now impossible to administer this trust the way they intended!”

Unfortunately, many attorneys do not get this kind of training. They just don’t have the experience of babysitting multiple estates through probate, setting up conservatorships, or administering trusts. They haven’t litigated wills on behalf of heirs. They don’t see how different kinds of trusts lead to different kinds of results. So, just like their clients, attorneys all too often assume that a “standard living trust” will be good enough.

Once you’ve found that good attorney, the one who has actually walked through probate and administered trusts and conservatorships—your next job is to make sure they sit down with you to ask a lot of questions. Make sure they turn over every rock and force you to face whatever the two of you find underneath.

Tough questions may include the unexpected, like: “Do you get along with your siblings?”

Why would such a question matter? Because if you are incapacitated, a sibling could easily step in and cause havoc in your planning, even if you have adult children. It happens.

Based on your individual circumstances, an attorney should also ask questions like, “Do you get along with your spouse? With your ex-spouse? Will your children get along when they sit in the room hearing the will read? Is your son or daughter likely to face divorce some day? Does he or she have a complex tax situation? If you become incapacitated, what will happen to that vote you have on the board of your brother-in-law’s business?”

You can see more examples of good question-asking by attorneys in the Introduction.


As I have now complained many times, attorneys often do not bother to dig deeply. They may simply pull up the John and Judy Smith Living Trust they did last week and replace all the names with Fred and Sally Jones.

But “search and replace planning” gets even worse with paralegals. Even if I have convinced you not to download a template or log into a “living trust service,” I worry that you may still attempt to save money by avoiding the services of an attorney. You may think, “Okay, but I have a very simple situation. I’ll save money on lawyers by going to a paralegal to get an estate plan drawn up.”

Paralegals have been trained in a variety of common legal processes. They do great work in many realms, and they are invaluable to keeping my own practice on track. But with all due respect to the profession, you must recognize the limits of a paralegal’s scope. Not only do paralegals lack the training and experience of a lawyer, they simply do not think like lawyers.

Law school not only teaches people legalities and case law, it truly rewires people’s brains. I will not dwell on this rewiring process, as much has been written about it by others. But I know it occurs, perhaps as an actual change in brain chemistry.

Lawyers learn to think ahead to many more moves of the chess game. They anticipate objections to documents. They anticipate the emotions of judges and litigants. When reading, they read between the lines. When speaking, they watch body language.

Let me give you a quick analogy from the medical world. I had a colleague who developed intestinal cancer go in to discuss his surgery. The surgeon says, “You know, before we do surgery, I want you to meet with your cardiologist for one more checkup. Don’t worry, it’s routine.” The cardiologist gets out his stethoscope and listens to the pulse on my colleague’s neck, and immediately orders a raft of tests. Bottom line: the guy has a hunk of fat nearly blocking his neck artery. The cardiologist immediately arranges for this to be removed. Later, the cardiologist tells my friend that had he not come to see the cardiologist and had gone through with the abdominal surgery with the blockage in his neck, he would have died. Indeed, if he was lucky, he would have died. Most likely, he would have had a massive stroke.

When you have surgery, you go to experts in the medical field. These professionals look for the unexpected and the unanticipated. They see clues only experience will notice. My colleague went in about one problem, but the pros saw something more.

The same is true in the legal profession. It’s my job to identify “fact patterns” the layman does not see, and follow through based on my experience. We’ve been trained to look at common fact patterns and possible results, then apply them to new situations—to see around corners, and to make sure you deal with “what you don’t know you don’t know.” (See Introduction)

You really do need someone “to think like a lawyer” and anticipate the consequences of a plan that will play out for decades after you are gone.

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