Is a site like legalzoom okay for doing an irrevocable living trust?
June 9, 2010 7:20 PM Subscribe
Is a site like legalzoom okay for doing an irrevocable living trust, or is that an insane idea?
My parents are interested in setting up an irrevocable trust and an LLC to protect their interests (and their children's interests) in some commercial property. My instinct is that this is definitely a job for an attorney. My dad wonders if legalzoom, which he has used for simple legal documents, would be adequate. I checked legalzoom and they offer living trusts, but I'm not sure they're irrevocable. Bonus question - does $2,500 sound like a reasonable fee for doing one? That's one attorney's offer.
My parents are interested in setting up an irrevocable trust and an LLC to protect their interests (and their children's interests) in some commercial property. My instinct is that this is definitely a job for an attorney. My dad wonders if legalzoom, which he has used for simple legal documents, would be adequate. I checked legalzoom and they offer living trusts, but I'm not sure they're irrevocable. Bonus question - does $2,500 sound like a reasonable fee for doing one? That's one attorney's offer.
I'd definitely use an attorney for this kind of thing.
As for the fee, I suppose it depends in part on where you live. If you live in NYC it would be more expensive than Omaha.
Etc.
posted by dfriedman at 7:30 PM on June 9, 2010
As for the fee, I suppose it depends in part on where you live. If you live in NYC it would be more expensive than Omaha.
Etc.
posted by dfriedman at 7:30 PM on June 9, 2010
Response by poster: FYI, we're in central Alabama.
posted by randomkeystrike at 7:37 PM on June 9, 2010
posted by randomkeystrike at 7:37 PM on June 9, 2010
An attorney can do more than just fill out the forms. The attorney can check to be sure that all the property being transferred into the trust *should* be transferred into the trust, can advise on specific terms of the trust, etc. Especially with irrevocable, you don't want to screw this up. This is where Legalzoom and such fails. Legalzoom or a similar site can't tell you NO GOD NO DON'T DO THAT if you're about to make some kind of permanent decision that will cost you tons and tons of money later. If you're talking about commercial property worth enough to have estate tax problems, you want a lawyer. If you're not talking about estate tax problems, you probably don't want an irrevocable trust.
But no, I don't think the Legalzoom one is irrevocable. The FAQ on estate taxes says they don't avoid estate taxes, which an irrevocable would.
posted by gracedissolved at 8:22 PM on June 9, 2010
But no, I don't think the Legalzoom one is irrevocable. The FAQ on estate taxes says they don't avoid estate taxes, which an irrevocable would.
posted by gracedissolved at 8:22 PM on June 9, 2010
I am a lawyer so assume whatever bias in favor of the profession.
Estate planning, ESPECIALLY for those who think they might have a taxable sized estate is not a point and click affair.
I do estate planning in the city where I live. I regularly see folks who've consulted such websites or other sources of data. Often I'm able, after a bit of interviewing to explain the situation, the choices and alternatives and the consequences of each. In every case the client's response has been "I'm glad I talked to you. Now I know what my options are." Even true when they then choose a do it yourself estate plan.
Further, on the litigation side of my practice I routinely see problems that require litigation, court involvement and the concomitant expense because the now deceased settlor or testator was penny wise and pound foolish and did their own estate planning.
If you have assets to the point an estate plan is worthwhile it's worth competent legal counsel. Period.
As to the facts you've described - Irrev trust, LLC, commercial property - you are WAY OUT on the higher end of the complexity scale.
The cynical response is - do it yourself. You'll screw it up and one of my litigation colleagues will be paid handsomely to undo the problem (if it is fixable) once the settlor is dead.
If your estate plan does not include "let's make some lawyer rich" as part of your goal - SEE AN ESTATE PLANNING LAWYER. As to cost - $2,500 or whatever there is too little data in your question to offer any opinion. That's not a shocking number but may not be reasonable depending on lots of factors you haven't elaborated on.
See a lawyer. At least the initial consult will convince you I'm right or convince you that you can do it yourself. Either way you are better off.
posted by BrooksCooper at 8:35 PM on June 9, 2010
Estate planning, ESPECIALLY for those who think they might have a taxable sized estate is not a point and click affair.
I do estate planning in the city where I live. I regularly see folks who've consulted such websites or other sources of data. Often I'm able, after a bit of interviewing to explain the situation, the choices and alternatives and the consequences of each. In every case the client's response has been "I'm glad I talked to you. Now I know what my options are." Even true when they then choose a do it yourself estate plan.
Further, on the litigation side of my practice I routinely see problems that require litigation, court involvement and the concomitant expense because the now deceased settlor or testator was penny wise and pound foolish and did their own estate planning.
If you have assets to the point an estate plan is worthwhile it's worth competent legal counsel. Period.
As to the facts you've described - Irrev trust, LLC, commercial property - you are WAY OUT on the higher end of the complexity scale.
The cynical response is - do it yourself. You'll screw it up and one of my litigation colleagues will be paid handsomely to undo the problem (if it is fixable) once the settlor is dead.
If your estate plan does not include "let's make some lawyer rich" as part of your goal - SEE AN ESTATE PLANNING LAWYER. As to cost - $2,500 or whatever there is too little data in your question to offer any opinion. That's not a shocking number but may not be reasonable depending on lots of factors you haven't elaborated on.
See a lawyer. At least the initial consult will convince you I'm right or convince you that you can do it yourself. Either way you are better off.
posted by BrooksCooper at 8:35 PM on June 9, 2010
An estate lawyer I know gets this question from prospective clients occasionally. His answer would be that you can save 2500 now, but your loved ones will end up spending 5000 later to an attorney to fix the mistakes and address the unforeseen problems of the DIY law route.
posted by nestor_makhno at 9:18 PM on June 9, 2010
posted by nestor_makhno at 9:18 PM on June 9, 2010
Do not under any circumstances use legalzoom for this.
posted by An algorithmic dog at 11:37 PM on June 9, 2010
posted by An algorithmic dog at 11:37 PM on June 9, 2010
I work for a competitor to LegalZoom, although we just do formations (Corps, LLCs, etc) rather than that plus wills and stuff like they do.
The tl;dr; answer is LegalZoom won't do this for you anyway.
Most of the entire industry (and especially LegalZoom*) has a mantra of "We cannot give legal advice". While we'll say stuff like "Generally speaking, veterinarian in California have to form as a Professional Corporation rather than a LLC or General for Profit Corp" and our websites have all kinds of info on what you can do, we cannot give advice based on an individual situation.
I guess it'd be possible for a company to be able to give actual advice, but they have to be certified in every jurisdiction they do business in. Even then, some places have weird rules about attorneys sharing fees and other things.
If your parents knew exactly what they wanted and just need help filling out the forms, a place like LegalZoom would work ok. Since it sounds like you need actual advice, you'll need to get a real lawyer.
*We secret shopped competiors and LegalZoom seemed the hardest to get customer service from. With my company you can just call us up. With them, I don't remember if we ever got them on the phone. You pretty much fill out the online form and that's it.
posted by sideshow at 12:41 AM on June 10, 2010 [1 favorite]
The tl;dr; answer is LegalZoom won't do this for you anyway.
Most of the entire industry (and especially LegalZoom*) has a mantra of "We cannot give legal advice". While we'll say stuff like "Generally speaking, veterinarian in California have to form as a Professional Corporation rather than a LLC or General for Profit Corp" and our websites have all kinds of info on what you can do, we cannot give advice based on an individual situation.
I guess it'd be possible for a company to be able to give actual advice, but they have to be certified in every jurisdiction they do business in. Even then, some places have weird rules about attorneys sharing fees and other things.
If your parents knew exactly what they wanted and just need help filling out the forms, a place like LegalZoom would work ok. Since it sounds like you need actual advice, you'll need to get a real lawyer.
*We secret shopped competiors and LegalZoom seemed the hardest to get customer service from. With my company you can just call us up. With them, I don't remember if we ever got them on the phone. You pretty much fill out the online form and that's it.
posted by sideshow at 12:41 AM on June 10, 2010 [1 favorite]
I think the realistic choices are: your dad can pay a lawyer now to properly draft a trust, or his kids can pay a lawyer later to bail them out of a poorly drawn trust.
posted by DarlingBri at 3:06 AM on June 10, 2010
posted by DarlingBri at 3:06 AM on June 10, 2010
Agree with the preceding, and will add: what they said is 10x stronger when you're dealing with something irrevocable. Because, well, once it's done it cannot be changed.
Legalzoom can give you a form to set up an LCC. But it cannot tell them whether they ought to use an LLC or an irrevocable trust, or to consider other alternatives.
Always side with getting it done right vs. getting it done cheap. Getting it done right costs less in the long run.
Red Adair, the oil fire fighter, was asked why he charged so much. "If you think hiring a professional to do the job is expensive," he said, "wait until you hire an amateur."
posted by megatherium at 5:26 AM on June 10, 2010
Legalzoom can give you a form to set up an LCC. But it cannot tell them whether they ought to use an LLC or an irrevocable trust, or to consider other alternatives.
Always side with getting it done right vs. getting it done cheap. Getting it done right costs less in the long run.
Red Adair, the oil fire fighter, was asked why he charged so much. "If you think hiring a professional to do the job is expensive," he said, "wait until you hire an amateur."
posted by megatherium at 5:26 AM on June 10, 2010
I am a lawyer and if I were in your situation I would consult another lawyer who specializes in estate planning. Not an area for amateurs.
posted by Carbolic at 7:20 AM on June 10, 2010
posted by Carbolic at 7:20 AM on June 10, 2010
Response by poster: Thanks for all the answers so far - you've confirmed my thinking, and if my Dad pushes back, I can say that several people on the internet agree with me. :-)
posted by randomkeystrike at 1:37 PM on June 10, 2010
posted by randomkeystrike at 1:37 PM on June 10, 2010
This thread is closed to new comments.
IANAL, but I'm former legal assistant to attorney who did estate planning, business formation, and real estate law. The price your parents were quoted sounds pretty reasonable.
posted by ishotjr at 7:30 PM on June 9, 2010