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Creating a DIY Living Trust? Here’s Why it’s a Terrible Idea

Creating a DIY Living Trust?


If you’re thinking about setting up your own living trust, it’s probably for two reasons: 

  1. You want to avoid probate.
  2. You’re trying to save money. 

We get it. Estate planning is an investment — and there’s nothing fun to hold at the end. You don’t get a new car or a great vacation or even a fancy new pair of shoes. 

What you do walk away with is peace of mind. Confidence that you’re protecting your assets, your loved ones, and your future. 

And you can’t get that peace of mind if you don’t have the confidence that your estate planning can actually do what you need it to do. 

A living trust can help you avoid probate, but if you try to save money by DIY-ing it now, you or your family will end up spending more in the long run to fix the inevitable mistakes. 

What is a living trust?

To understand why trying to set up your own trust isn’t a great idea, it’s helpful to know what a trust is

A trust isn’t just a piece of paper. It’s a legal agreement between two parties, and a trust must be funded to be effective. One party (the grantor) gives the other party (the trustee) the right to hold property on their behalf for the benefit of a third party (the beneficiary). 

The most common type of trust used for estate planning is a revocable living trust. 

A living trust is a trust that is created and active while the grantor is alive. A revocable trust is one that can be revoked after it’s created. In this case, a living trust is revocable until the grantor dies. 

Here’s how living trusts usually work: 

The grantor names themself as the trustee of the trust during their lifetime. That means they maintain control over the trust while they’re alive. They can put assets in or take them out. They could dissolve the trust entirely if they wanted to. 

The grantor also names a beneficiary (or multiple beneficiaries) and a successor trustee. When the grantor dies, the successor trustee takes over management of the trust. All remaining assets are transferred to the beneficiary in accordance with the terms of the trust. 

See more: Revocable Living Trusts: Improving Quality of Life Through Peace of Mind

How to set up a living trust

You should not attempt to set up a trust on your own. You’ll waste time and money — and you could harm your loved one’s future interests. 

But it is helpful to understand what an attorney is doing when they create a living trust for you. 

An attorney will:

  • Help you identify which assets to transfer to the trust 
  • Advise you on naming beneficiaries — both who they are and how the terms should be set up to best protect their interests 
  • Assist you in choosing a successor trustee
  • Identify and draft any conditions you want in the trust
  • Transfer assets into the trust
  • Create a pour-over will to help ensure probate avoidance 

See: Do You Need a Will if You Have a Trust?

Risks of setting up your own living trust

The problem with setting up your own trust is that it’s a complex legal document that only estate planning attorneys know how to draft. So if you’re trying to create one yourself, you’re probably using a template you found online. 

And that template was created to fit the general needs of a general public — which doesn’t work for trusts. 


Because a trust is a very specific legal arrangement meant to address your specific financial and estate planning needs. It’s not a one-size-fits-all document. 

Plus, it takes time, energy, and organization to create a trust and fund it. 

Here’s an example: 

Jenn wants to create a trust so that her family doesn’t have to go through probate when she dies. She has two young children, so ensuring funds are properly managed by a trustee is important. 

Jenn downloads a living trust template and fills it out. She does the work of transferring her house into the trust. She knows it’s her primary asset. But life with two little kids gets busy, and she never gets around to transferring any of her other assets. It crosses her mind occasionally, but she figures it’s not a big deal because she’s not super wealthy. 

Unfortunately, Jenn passes away five years later. None of her other assets were ever transferred to the trust. In the meantime, she’d been promoted several times at work and had inherited a small sum of money from her uncle. 

When she dies, her checking and savings accounts have a combined balance of $75,000. Those accounts were never transferred into a trust, so that money has to go through probate before it can go to her children. 

One of her children is now 20 years old and has developed a gambling problem. The money in the trust won’t be available to him until he’s 30, based on the terms of the trust. But this money is available as soon as probate is complete, and he immediately gambles it away. 

Jenn couldn’t have envisioned this scenario when she created the trust. How could she? 

That’s what good estate planning attorneys do. They help draft trusts that prepare for potential risks, and they keep track of what needs to be transferred into the trust. 

We work with clients everyday to create effective estate plans — including trusts. Schedule an estate planning consultation to see how we can help you. 

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