How to Set Up Your Living Trust at Home

This post may contain affiliate links. Please see my disclosure to learn more.

I was super excited to finally have our living trust notarized last weekend in the presence of two friends who kindly gave up a Saturday morning to be our witnesses. Now that the living trust is behind us, I finally have the bandwidth to jot down a few comments on the process as a whole, plus share a few tips and answer a few questions on how to do-it-yourself in the comfort of your home. Or in my case, whilst wearing pajamas.

What is a living trust?

A living trust is a form of estate planning that allows you to control your assets while you are alive but have your money or properties distributed to people of your choosing once you pass. It is comprised of documents written in a standardized way that outlines what happens to all the assets you’ve worked hard for after your death. It is important because it ensures that your property and money goes to people who you want it to go to.

Is a living trust the same as a will?

A living trust is not the same as a will. A will is something that you can write and simply keep or give to someone you trust. It is not a formal document. In a will, you can outline who you want your assets to go to in the event of your passing. However, once you do pass, your assets do not immediately go to the people or organizations that you’ve outlined in your will. It goes to the state (in my case, California) who will take it upon itself to divvy your assets as dictated in your will. In the case of a living trust, your assets go directly to your Trustee (someone you name as the controller of your assets) who will then divvy up the rest of your property as dictated in your living trust.

The main difference is that at the time of your death, your property will either go to the state for dispersal or to the Trustee that you name.

Why do I need a living trust?

You want a living trust over a will because the state of California is very busy and will not disperse your assets without a fee. And a nominal one at that. They will first use your assets to pay off any debts or fees that are in your name. Then they will take a cut for the distribution of assets, usually a percentage of the asset price. By having the state do all of your asset distribution for you, you could potentially lose a lot of your assets in fees!

Alternatively, the living trust will protect your assets and transfer them directly to your Trustee at the time of your death. The Trustee will then be responsible for distributing your assets, without having to lose any of your assets.

How Much Does a Living Trust Cost?

Most frequently, living trusts are concocted by estate planning lawyers. Research in the Orange County area of California revealed that the costs of drafting a living trust with a lawyer costs anywhere between $2,500 to $3,500. Of course, this does not include additional fees for additional assets, recording with the county, or notarization of documents. I, however, produced my living trust for a mere $329, including a living will and Power of Attorney documents.

Why the huge price difference?

Because people assume that lawyers know something we don’t know. And they do. They know that a standardized form is sufficient to drafting a living trust. I could have written my living trust from scratch, but in order to ensure that I was following the standardized structure for a living trust and using the correct verbage, I created my living trust using an online company instead of hiring a lawyer.

When we were talking with a estate planning lawyer, I noticed that she handed me print-outs written using big font. The print-outs looked like they were written in the 1980’s or 1990’s. They had fill-in-the-blanks that elementary students could fill out, given that they had the information. The fill-in blanks were things such as ‘Name’, ‘Address’, ‘Asset’, and ‘Trustee’. It was only a few pages long, and extremely simplistic.

So I asked myself, “Is this all there is to it?” After a few moments of research, I learned that it is. People pay for estate planning lawyers for peace of mind, under the assumption that a lawyer’s education makes them an expert. They pay a premium for the convenience of not having to write it themselves or to do the leg-work. Honestly, I think people pay the high fees because that’s what most people do. We’re all just lemmings following each other to the edge of the cliff.

Thankfully, the internet is chock-full of guidelines for doing your own living trust.

How did I Set Up A Living Trust at Home?

As I said previously, you can write it yourself from scratch. It doesn’t have to follow an exact format, but it does have to contain the correct information and be thorough. You’d hate to leave money on the table because you left something out of your trust. Do recall that this is one of the reasons why people choose to pay lawyers to draft their trust – the fear that they won’t do it right.

I had my own doubts about my abilities to write one from scratch, and I honestly did not want to spend a lto of time learning everything there is to know about living trusts. So I found a solution that was in the middle. I wrote my living trust using Legal Zoom. I had set up an S Corporation through the same company four years ago, and really like the customer service I received at that time. So I was quite excited to learn that they charged only $329 for an estate planning bundle.

When you purchase this bundle, you get a living trust, up to two basic wills, up to two powers of attorney and a year of attorney assist – access to an attorney who can answer all your questions about your trust. This year of attorney assist should be cancelled before the renewal one year later, to avoid the recurring fee of $120. I recommend cancelling the Attorney Assist once your trust is completed, notarized, and recorded, so there are no surprise fees one year later.

My hunch was correct in that the writing of the trust only required me to fill out my information on a template – a process that took me 15 minutes. To check out, you simply pay the fee at the end, and submit the forms. Within a day, my forms were finalized by Legal Zoom and were ready to print. A guideline on the following steps required to notarize your documents are included in your package. All-in-all, the process probably takes 39 minutes total.

How do I Notarize My Living Trust?

Notarizing a living trust is quite simple. A quick Google search of local notaries informed me of their abundance. Luckily, one of my neighbors happened to be a notary, so I emailed her and through this process, I’ve gotten to know our neighbor! Some notaries will be willing to travel to your home, but for an additional fee. I went with a notary that charges per signature, rather than a flat fee. To give you an idea, we paid $15 per signature for our notary, for a total of $150. Other notaries were charging a $200 flat-fee. We ended up saving money by walking to our notary’s office, and choosing one who charged per signature.

A way to reduce notary fees is to have witnesses. Technically, the documents don’t all have to be signed by the notary. Some parts can be signed in front of two witnesses or a notary. If you want to save money, choose to bring two witnesses to your signing. Just keep in mind that witnesses cannot be anyone with familial relationship to you (whether by blood or marriage) nor can they be a benefactor in your living trust.

Lastly, make sure to ask your notary if they have the ability to notarize living trusts and powers of attorney. Not every notary has that power, and it will save you a trip by asking ahead of time.

How Do I Transfer a Deed to My Living Trust?

Transferring a deed to your living trust takes a bit more work, and requires a different service altogether. However, you mustn’t leave your real estate behind. The process of transferring a deed to a living trust is equally simple. Legal Zoom can do a Standard Real Estate Deed Transfer for $249. Once again, you can do the transfer yourself, which will require you to write the documents as well as record the transfer with the county recorder’s office. The recording of transfer with the county has a tiny fee, which differs depending on where you live.

How Do I Transfer My Assets?

Part of your living trust package includes letters that must be sent to your asset accounts. For every asset you listed under your trust, Legal Zoom provides letters to be mailed to each account letting them know that you are transferring the ownership of your asset to the Living Trust. It was quite simple to do. I just logged into each institution, found the address designated for TDA (or Transfer of Assets) and mailed each letter to them.

What next?

After our living trust was notarized, our deed sent to the county office, and our letters send to all institutions, we made a few copies of our trusts. We keep the original copy with us, and handed another copy to our parents for safe-keeping. We are also planning on renting out a safety deposit box at a bank somewhere to hold a copy. However, I am pausing on that for now since it comes with a yearly fee – and you all know how I hate subscriptions. An alternative would be to get a fire-proof safe at home, a decision left for another day.

I know estate planning is boring stuff, but it’s really something I urge you to do. Legal Zoom made the entire process easy for us, and it really didn’t take a lot of time. Compared to paying thousands of dollars and spending hours meeting with a lawyer, creating a living trust took only an hour or so of our time and a couple hundred bucks. Plus, getting to do it all in the comfort of my home makes working with Legal Zoom one of the best decisions I have made.

Photo by Florian Klauer on Unsplash