A "living trust" is NOT an "estate plan"

Your living trust is not your estate plan.  

There is a common misconception out there. Many people think their living trust is their estate plan. You see, some people ask me to review their legal documents. They come to the office with their entire estate planning binder and they say, “Here’s my living trust for your review.” What they don’t often realize is that the binder is NOT their living trust. The living trust is simply one of the tools in the binder. That’s like calling your toolbox a “hammer.” The toolbox is NOT a hammer. The hammer is simply part of the overall toolbox. It’s “inside” the toolbox. Calling the entire toolbox a “hammer” is not accurate much like calling your estate plan a “living trust” is not accurate.

So, when people say they want me to review their “living trust,” I explain that what I really need to review is their entire estate plan. That includes their wills, their property agreements, durable powers of attorney, health care directives and related document, assets, etc. I need to review the entire estate plan. Imagine if you went for a physical exam at the doctor’s office and you said, “Hey Doc, I just want you to listen to my heart. Don’t examine anything else!” Your heart is NOT your entire body. You can’t conduct a physical examination simply by checking someone’s heart. There is so much more to it than that.

Therefore, people call my office all the time and say, “Hey, I need you to do a living trust for me.” I explain that’s like going to the car dealership and saying, “Hey, just sell me an ‘engine’ – I don’t want the wheels, seats, or anything else.” So I tell the prospective client that what they are probably asking about is an “estate plan” which include much more than a living trust. Their natural reaction in many cases is to say, “I don’t have an ESTATE. I’m not Bill Gates!” Then I have to explain that estate doesn’t mean “wealthy” or rich beyond measure. Your estate is simply all that you own, whether you have $5 million or $5000.

If you are going to prepare a solid estate plan, you don’t simply want a living trust. You want to make sure your toolbox is full of all the tool you and your family might need. What good is having a hammer if you don’t have any nails or other tools in the box you might need?

Please give us a call if you have any questions regarding your existing estate plan or if you'd like to learn more about all the options available to you. Call 661-414-7100.