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The Declaration of Trust

The declaration of trust is just a paper, that has do be drafted. That sounds very easy but indeed, it’s not. Before you can actually start to compose your very own trust document, you have to fully understand the implications of your undertaking and the potential dangers that are involved. It is easy to make mistakes and hard to avoid them. As a trust law attorney in several counties (San Francisco, Alameda, Contra Costa, Sacramento) I know, what I’m talking about.

It can easily happen, that for example an ambiguous term is used or (worse) that a conflicting clause is drafted into the final trust document. In this case the main trust advantage (avoiding court proceedings) can turn to the opposite: Your children might start to argue about the meaning of the trust document. One of the descendants might interpret the document in a different way as the grantor meant it to be interpreted, another one might disagree. The arising dispute can then easily end up in court and cost plenty of money, thus rendering the whole estate planning useless.

Therefore the drafting has to be done with the utmost care possible to avoid later disputes. Actually, in my opinion, a layperson should not dr
aft living trust documents by himself at all. But if you decide to do so anyway, the following shall provide basic assistance.

Preparation of your Living Trust

No drafting is actually done form scratch. All lawyers use sample trusts for the basic clauses and the overall structure of a living trust. The basic concept is then usually adjusted to the special needs of their clients. If you draft a living trust document yourself, that should be way to do it.

Therefore the first thing to do is to get a suitable sample form for your living trust document. You could either use the internet or a guidebook to find the right sample for you.

Suitable Living Trust Sample Forms on the Internet

There are some sites on the internet that offer sample forms free of charge. That would be the low-cost option. But like every free bargain these offers have to be treated with care. Often there is only a very standard form for one living trust that needs a lot of change if you want to use it for you personal situation.

Another option is to pay for a sample form. Many sites on the net offer a variety of forms, that are often already adjusted to the respective state law. Sometimes there are even forms for different living situations. Prices vary from site to site and sometimes you can get a form for as low as 15 $. It is more likely that you could find a form in the pay-form-market, as there is more diversity. However in most cases you won’t see the form before you have paid for it. Therefore sometimes you will buy a form, that does not match your needs.

Finally there is an emerging market of online-living-trust-making sites. They all work in a similar manner. Usually customers are asked to fill out a more or less complex questionnaire regarding their personal situation. Then a computer creates an according trust document, sometimes including an according last will, from your answers. Those documents are often neatly formatted and look really good. Some sites even offer a personal review service, that checks the final trust document for inconsistencies and other errors. The result is in most cases more suitable for your personal situation than the use of simple forms. However these services are pricy compared to the other options.

Sample Living Trust Guidebooks

The old-fashioned way is the use of traditional guidebooks. The main advantage compared to the use of the internet is that you can actually sample-read a book at your local bookstore before you buy it. That allows evaluation of the publication’s personal usefulness before you spend any dollar. Often those books come with a CD that contains sample forms, that can be modified on your pc. In many cases the forms in the books are as good – or even better – than the forms, that are available on the internet.

The Appearance of the Living Trust Document

Besides the content, the outer form of the trust document should not be neglected. In my opinion as a San Franciscan trust lawyer the appearance of a significant document should always match the importance of its content. Therefore the final trust document should look like as a lawyer had drafted it.

The standard rules for text formatting apply. The structure of the trust document should be numbered and headers should be accented by larger fonts. Only one font should be used and the paragraphs should be in justified alignment. The pages should be numbered consecutively as well.

If your sample trust form contains blank spaces for handwritten insertions, it looks better to replace the underline characters with the proper words (e.g. your Name) in your word processor. You should also ensure to delete any unnecessary sections of your document, e.g. if you don’t have as many beneficiaries as the original form provides, delete the dispensable section. If you leave blank section in the trust document, the notary (see below) might else refuse the notarization of your signature.

The Language of Your Living Trust Document

The language of your trust document should be clear and unambiguous. Any confusion or contradiction should be avoided. Usually the sample forms will provide the necessary language and accuracy. Especially if you want to apply changes to the trust document you have to carefully choose the words in order to conserve the clearness of the sample form.

If your not sure about your trust document you should see a lawyer. Rinne Legal in San Francisco, Oakland, Fairfield, Walnut Creek and Sacramento is your local estate planning lawyer in the Bay Area to help you with the wording.

Double-checking of the Most Important Content

Before heading off to the notary you should carefully proofread the whole document. You should especially take care of the following:

  • Have you made accurate and suitable arrangements for the management of the trust after you have died? Is the name of the successor trustee spelled correctly?

  • Did you include all the beneficiaries to whom you want to leave parts of your estate? Are their names spelled correctly and consistently?

  • Is all property, that you want in the trust, included in the property schedule? Is the respective property clearly and unambiguously identified in the schedule? (e.g. are account numbers correct?).



Finalizing the Living Trust Document

Once the drafting is done, the document needs to be signed by the grantor and the trustee. It is highly recommended that the signature is notarized by a public notary of your living state. The notarization avoids later disputes of your beneficiaries about the authenticity of your signature.

In a revocable living trust document, grantor and trustee are normally identical. Nevertheless some forms are designed with two signature spaces: one for the grantor and one for the trustee. Some other forms require only one signature but the signature line is underwritten by the terms “grantor” and “trustee” instead. Both ways are possible.

If you create a shared living trust with your partner, both of you have to sign as co-grantor and co-trustee. The two signatures have to be performed in the presence of the notary.

Some states require the registration of a living trust within a trust register. However there is no trust register in California. Therefore, if you move into the Bay Area there is no need to register your trust.

Securing the Trust Documents

It is highly advisable to store all documents that are related to the trust in a secure place. You will have to ensure that the original documents are guarded against all kinds of threats,  e.g. fire or burglary. At the same time the trustee should be enabled to find and access the documents in the case of the grantor’s death or incapacitation.

As an additional security measure copies of all documents should be made, marked as copy and stored in a different place. Today it is also a good option to scan the documents and save them to an online hard drive. Again it is important that the trustee will be able to access the copies, in case the originals get lost. Therefore it is a good idea to inform the trustee of your undertakings and to provide the necessary access information, like username and password.

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