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Online Trust Creation: Estate Planning


Online tools allowing anyone to create a trust without the help of an attorney can reduce the money and time consumed in estate planning. Living trusts are widely used in estate planning to avoid probate and reduce costs and delay in settling estates, but an attorney may charge thousands of dollars to create one. Online trust creation tools may cost a few hundred dollars or, in some cases, nothing at all and take only a few minutes to use.

A financial advisor can help you create an estate plan for your family’s needs and goals.

Online Trust Creation Basics

Trusts are widely used in estate planning to direct how assets will be distributed after the owner’s death. One major advantage is that assets placed in a trust can pass to heirs without going through probate. The probate process usually takes at least several months and, in addition to the delay, requires paying various legal and court fees. Going through probate also involves making the estate’s financial details public, while trusts let people keep their information private.

While a trust can be an estate planning boon, it can also cost a lot to set one up. An attorney may charge from $1,500 to $2,500 to draft the legal documents for even a simple trust. Trusts for complex or large estates can cost several thousand.

Online trust creation tools provide a less expensive option for people planning their estates. The prices for these alternatives range from a few hundred dollars to free.

Online trust makers don’t require hiring an attorney. Instead, software guides users through a series of questions to determine who will be the trustee, which assets to include in the trust, and the people or entities (including charities) that will receive assets. The process can be completed in half an hour or less.

The trust documents will be customized to be valid in the specific state where the trust creator resides. This is essential because trust laws vary by state. It’s one way in which using a trust creation tool differs from employing downloadable trust forms and hard copy books, alternate approaches to do-it-yourself trust creation that rely more on the user to tailor the trust to local laws.

Additional Steps in Online Trust Creation

SmartAsset Estate Planning Guide: Online Trust Creation

Creating the trust online is not the end of the process. Your signature on the documents generally will also have to be affirmed by a notary public. This can be done online as well for a small fee.

Another essential step involves transferring assets into the trust. This process can be as simple as listing the assets that will be included in the trust in the trust creating documents. For some assets, such as real estate, it’s more complicated and may involve submitting additional documents such as titles.

After creating the online trust, the owner may have an attorney review the documents. Review will typically cost only a fraction of the sum an attorney would charge to create the documents. Some online trust creation tools offer bundles that include, at nominal extra cost, review by a licensed attorney. Legal review increases the chances that the trust will withstand any potential future court challenges.

Online Trust Creation Limits

While a trust can be useful in estate planning, small estates may not need one. This is often true when someone plans to leave all assets to their spouse. In this case, even the modest cost of an online-made trust may be unnecessary.

For estates that can benefit from a trust, creating one without an attorney also carries risks, especially for someone who isn’t ready to devote effort and attention to the task. In addition, online-made trusts are not well-suited to certain estate planning situations, including when the creator has many debts. In these instances, going through probate may provide a better way of handling creditors.

Trusts that will include conditions and restrictions on gifts may also need to be handled by an attorney. Finally, large estates that will incur estate taxes can benefit from the assistance of an attorney who can help create a trust what will avoid or effectively manage estate taxes.

Bottom Line

SmartAsset Estate Planning Guide: Online Trust Creation

Creating a trust using do-it-yourself online tools can help accomplish effective estate planning without spending a lot of money. Online trust-creating tools guide users through questions to determine key elements of the trust, and the process can be completed in about half an hour. The costs range from free, for some tools, to a few hundred dollars for others. Available add-ons include getting an attorney to review the documents. Do-it-yourself online trusts may not be well-suited to complex or debt-burdened estates, but for others can be a solid choice for saving time and money.

Estate Planning Tips

  • A financial advisor can walk you through the details of creating an estate plan. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
  • A trust is just one of several estate planning documents that can be central to doing the job effectively. Others include a will, one or more of several types of power of attorney and beneficiary designations. Access to insurance policies, property deeds, investment and bank account records and other paperwork may also be necessary.

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