What Attorneys Don't Want You to Know

Legal Information is not the same as legal advice

If you have no real estate, your assets are modest and you don’t have concerns about your children fighting over your estate, there is something you can do to avoid probate other than purchasing a Revocable Living Trust. With brokerage accounts, you can contact your agent or firm and ask for their Transfer on Death (TOD) forms and place that designation on all of your non-qualified brokerage accounts to avoid the time and expense of probate. You can also avoid probate by designating your bank accounts as Paid on Death (POD).

Both of these designations, TOD and POD, simply name beneficiaries in advance, allowing you to pass that money to your heirs probate-free. Your annuities and life insurance policies avoid probate because you designated primary and contingent beneficiaries when you purchased them. This is what you are now doing on your brokerage and bank accounts with the TOD and POD forms- naming beneficiaries in order to avoid probate.

Attorneys make money based on your lack of knowledge, which is why they don’t tell you about the TOD and POD forms. Another ploy commonly used by attorneys is to sell you a Testamentary Trust, as opposed to a Revocable Living Trust. A Testamentary Trust does not avoid probate. Most people choose a Trust in order to avoid probate. The attorney is playing on your ignorance because he can now charge you for the trust and still probate your estate.

Henry W. Abts III, author of The Living Trust, is considered by many to be the foremost authority on Living Trusts. In his book he states: “The Testamentary Trust is the best of both worlds for the attorney, who collects a substantial fee for drawing up the Trust now and a probate fee later.”

Another ploy often used by attorneys is to convince you a Will is all you need. They claim it is “less expensive” than a Revocable Living Trust. They make statements like “your estate is not large enough for a trust.” They end their sales pitch with statements like, “Besides, our state is a probate friendly state.” If you choose to follow his advice (which I do not recommend), ask him if he will sign a notarized letter limiting his legal fee to his present hourly rate come probate time. If he is willing to do this (which would be pointless for him if you lived another 10 to 20 years) and you don’t mind the time factor in your state for probating the average estate (which could be a year or more) then you might consider a Will or a Testamentary Trust.

Some attorneys try to scare people, especially those over age 65, who don’t have properly drawn HIPAA forms. One group of attorneys was trying to get its potential clients to pay $500 for this form. This form is available in most doctors’ offices at no cost, so when we say look for a “qualified” attorney, we am not just speaking of his competencies but also his ethics.

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