You do not need an attorney to make a trust, but you will need to know how to form a trust on your own. 

Many people who want to create a living trust contemplate hiring a living trust lawyer. Hiring a living trust lawyer can cost between $1,200 to $2,000, which does not itself guarantee you top-quality service. For simple situations, you can use do-it-yourself books or software and pay around $60.

If you are willing to invest some time using a high-quality do-it-yourself product, you could create just as good a trust yourself. Many people create their own forms and then have an attorney review their documents in what is called limited scope representation.

When Should I Use a Lawyer?

Why not do it yourself? If you have a unique situation, need a special needs trust, or are overwhelmed by a complex or large estate, hiring a living trust lawyer can definitely help you sort out any questions or handle creating a complicated living trust. 

If any of the following circumstances apply to you, you should consider hiring an attorney:

• Your net worth is close to the estate tax exemption
• You have a child with special needs
• You need advice about funding the trust
• You want to include complicated conditions dictating how and when beneficiaries receive assets

Hiring an attorney to create a trust usually will cost more than other estate planning documents but paying the upfront cost for sound legal advice can save you and your loved ones money in the future.

Even if your trust is simple, you should consider speaking with an attorney. An attorney can review the trust you created or advise you about laws that are specific to your state.

Before questioning whether you need a lawyer to create a trust, you should know what a trust is and think about whether you need one at all.

What Is a Trust?

Trusts allow people to say how their property will be distributed after they die while maintaining some control over their property while they are alive. A trust can be simple or complicated to create, depending on your assets and family situation.

Trusts often are misunderstood. A trust is not a document, but you will need to draft a trust document to create a trust. A trust is a legal relationship through which someone manages assets for the benefit of another person.

Like a will, a trust is a way to ensure your property is distributed to your loved ones according to your wishes. Unlike a will, which does not take effect until the person dies, a trust can begin operating as soon as it is signed and funded. 

What Is a Living Trust?

A living trust is a trust created during life to either save tax money or establish a long-term way to manage property. Living trusts are specifically designed to avoid probate and are also used to safeguard financial privacy and manage assets should the owner pass away or become incapacitated.

When Should I Have a Trust?

A trust is not necessary for everyone. If you are single, have no children, rent your home or apartment, and do not own significant assets, you likely do not need a trust.

If you have minor children, a child with special needs, or significant assets, a trust is a wise tool to use.

Typical reasons for having a trust are:

• Avoiding the probate process and the costs and time associated with it
• Protecting assets for children until they are mature enough to own them
• Avoiding or reducing estate taxes
• Having more flexibility than a will
• Managing assets when the settlor is incapacitated
• Preventing finances from becoming public record in probate court

Most people do not need to worry about estate taxes. Few states have estate or inheritance taxes, and the federal government only assesses such taxes on estates with significant assets. However, Congress revises the estate tax laws from time to time, so you should learn what the current estate tax exemption is when creating your trust.

Merely having a trust does not automatically mean lower estate taxes. You will need an irrevocable trust that contains the necessary terms to avoid or reduce your estate tax liability. If you feel that your net worth is close to the estate tax exemption, you should consult with an estate planning attorney.

Living Trust Basics

The ease of creating a living trust is comparable to creating a last will and testament, which many people do without the help of a lawyer. To understand whether you can do it yourself, it is helpful to know what goes into a living trust.

Types of Trusts

A trust can be revocable or irrevocable. Most people choose a revocable trust because they want to retain the power to revoke or amend it.

An irrevocable trust can be beneficial for tax purposes, but it is not a good option for most people. It cannot be revoked or amended except under limited circumstances.

A living trust is a trust used to manage property while you are still alive. A testamentary trust is a trust that is created through a will. It only becomes effective after the person who made the will dies.

How Do I Make a Living Trust?

A living trust document usually starts with a very basic template and includes the following information:

• The creator of the trust (your name if it's your trust). The person who creates the trust is called the "settlor."
• The trustee, the person in charge of managing the trust (again, this is your name if it's your trust).
• The trustee who will take over managing the trust and distributing the property when the original trustee dies or becomes incapacitated. This is usually a spouse, close friend, or adult child.
• The beneficiaries - the people who will get the property of the trust (the same as in a will).
• The trustees who will manage any property left to young beneficiaries. Often times, when children or young adults inherit property from a trust, there is a delegated trustee to manage the property for them until they are of a mature and competent age to manage it themselves.

After you have drafted your trust with all of the pertinent information, sign it in front of a notary. Then, to make it effective, use a deed or standard transfer document to transfer the property of the trust into the trustee's name, per the trust's terms.

Your next step is to fund the trust. This involves transferring ownership of property to the trust. Real estate will require a deed, and you should re-title other assets in the trust's name. You also can add a provision to a will that makes the trust the beneficiary of any assets you fail to place in your trust or name in your will, but these assets will go through probate and will not transfer to the trust immediately.

Who Should Be the Trustee?

Unless you are creating an irrevocable trust, you should be the initial trustee so you can maintain control over your assets. You should name a successor trustee to manage the trust after you die or become incapacitated. It is also a good idea to name additional successor trustees to manage the choice if your first successor trustee cannot serve.

Your successor trustees should be people you trust to manage your assets. Do not micromanage your trustees with an extensive list of what they can or cannot do. Choose people you believe will make good decisions and who are responsible with money. After all, it is called a trust, not a mandate.

Drafting a Living Trust? Make Sure it's Valid With Help From an Attorney

Although educating yourself about living trusts and other forms of financial planning is wise, you can hardly be expected to become an expert in the matter overnight. A lawyer can use their knowledge of the law and experience in estate planning to help you establish financial structures that meet your individual needs. Contact a local estate planning attorney to learn how they can help address your living trust concerns.