Online Trusts And Wills In The United States: Everything You Need To Know

There are certain things in life we’d all just rather not think about. A prime example, as an adult, is considering getting a trust or will that determines what happens to your assets after you pass away. 

Most people avoid this topic because…well, it’s not pleasant to think about. But the sheer cost of hiring an attorney to prepare those documents is another reason folks opt to ignore trusts and wills.

If cost is the reason, there’s no need to delay any longer. You can take advantage of online trusts and wills to prepare either or both, do-it-yourself style.

This is a question that needs to be addressed before we go any further. That’s because many people use the two interchangeably, as though they’re basically the same document; or perhaps two versions of the same document. They’re not.

A will is the simpler of the two. Its most important functions are to appoint a guardian for any minor children you have, as well as to manage the distribution of assets upon your death.

A trust is the more comprehensive of the two documents. Rather than appoint a guardian for your minor children or manage the distribution of your assets, a trust instead becomes a legal entity that takes custody of your assets. (Guardianship of your minor children must still be provided for in your will). Unlike a will, a trust is not subject to probate or legal challenge. That makes it the stronger of the two. 

You’ll need to appoint a trustee to oversee the management of the assets in the trust, as well as spell out exactly what those assets will be. And while a will takes effect only upon your death, a trust can either go into effect while you are still alive or be created upon your death (as a result of trust documents prepared in advance and online). 

Online trusts and wills are the same documents that will be prepared for you by an attorney. The only difference is that no attorney is typically involved. Much like many other transactions and processes, the preparation of trusts and wills becomes standardized and automated when they’re made available online.

The standardization is actually an advantage. The structure of both trusts and wills is determined by laws and legal disputes in each state. For that reason, the documents are easily standardized, even to accommodate situations and provisions that may be unlikely but not unknown.

You’ll be able to access trust and will document online for your state of residence. Once you select the right forms, it will simply be a matter of inputting the information that applies to your own preferences for your estate or trust. This will allow you to customize each form to meet your specific needs.

You can think of it as something like the FAFSA you likely filled out when you applied for financing for college. Another example is if you’ve ever done your income tax return, using tax-preparation software. The software asks for all the necessary information to complete your return.

All you need to do is provide that information, and the online service will generate fully completed wills and trust documents – ready to print.

More than anything else, online trusts and will automate the preparation process and do it at only a fraction of the cost of attorney-prepared documents.

Information you should expect to provide for the completion of your will or trust document will likely include the following:

• Personal identifying information. This includes info such as your full name, address, date of birth, and Social Security number.
• If you’re married, the name of your spouse. Plus, his or her personal identifying information.
• Beneficiaries. This will include the names and personal identifying information for each beneficiary named in your will or trust.
• A trustee. The name and contact information for the trustee for either your estate or trust. This can be an individual or an institution, like a bank.
• A list of all assets. That will be included in the will or trust. This will include bank accounts, taxable brokerage accounts, retirement accounts, real estate owned, and personal property.
• Life insurance policies. You may also need to provide information on life insurance policies. This will be especially important if the proceeds from the policy will fund your trust.

This is just a partial list of the information you’ll need to provide for the preparation of your will or trust. How much will be needed will depend on what you want your will or trust to accomplish.

Even though it’s possible to create do-it-yourself online trusts and wills, it’s not something you want to be cobbled together from various sources on the web. Instead, there are online services dedicated to providing assistance in the preparation of trusts and wills. 

One of the best examples is Trust & Will, which offers easy-to-use estate planning online. Unlike a lot of online legal document sources, they don’t offer assistance with many different kinds of documents. Instead, they focus entirely on trusts, wills, deed transfers and probate support. If you’re going to prepare documents as complex and specific as trusts and wills, you’ll need the assistance of a company that specializes in that niche instead of dozens of offerings.

They’ll provide you with all the necessary legal forms which are designed specifically for the laws within your state of residence. Armed with those documents, you’ll simply enter your personal information in a series of input screens, and the documents will be prepared for you. What’s more, those documents have been provided by experienced estate planning attorneys. In fact, certain documents will be reviewed by experts from Trust & Will before they’re finalized.

One of the benefits that makes Trust & Will stand out from the competition is that you can make unlimited changes to your documents as your personal circumstances and finances change with a subscription.

» MORE: Read our full Trust & Will review.

The answer is yes, as long as it meets certain legal requirements. And those will be spelled out to you by the online trust and will provider.

All you need to do to make trusts and wills legal is to complete the proper forms, then sign them along with any other required parties. Then presto, the documents are legal.

Between the two, trusts are the more complicated plan. It will need to contain the following information to be legal:

• It must include the name of the maker of the trust, also known as the grantor. That would be you if you’re the one creating the trust for the benefit of others.
• It must appoint an individual who will be responsible for managing the trust, which can even be you in the case of a living trust.
• The plan must also name the individual who will take over the administration and management of the trust after you die.
• It must list the beneficiaries who will receive property pursuant to the trust.
• It must provide the name of the person who will manage the trust after your death if it’s for the benefit of minors.

You should also check with laws in your state as to who and how many signatures you will need. Typically, you will need to sign the document in the presence of a notary public, but your state may also require signatures by one or more witnesses. 

As long as you have all those bases covered, either your trust or you will is completely legal.

Online trusts and wills are becoming increasingly popular. That’s because of the many benefits they offer when compared to having them prepared by a law firm.

Those benefits include: 

Prepare documents from home

If you have a busy schedule, it can be difficult to carve out time to meet with an attorney, let alone follow-up visits. But perhaps like a lot of people, going to an attorney’s office is something like going to your dentist or doctor – it’s something you’d rather avoid if you possibly can.

Online trusts and wills give you the benefit of being able to prepare documents from the comfort of your own home.

You only need to supply information – not prepare the documents 

Typical online trust and will programs are set up based on a question-and-answer format. You’ll enter the necessary information (see list of that information above) into input screens, and the documents will be automatically populated and prepared for you. You don’t even need to know anything about trust and will documents.

They’re low cost 

A lawyer will charge a minimum of $300 for a very simple will, but $1,000 to $1,200 is much more common. By contrast, an online will can be prepared for less than $100. 

The savings on a trust preparation are even more significant. An attorney will typically charge several thousand dollars to prepare a trust, while an online plan will be no more than a few hundred dollars. 

They’re simple

Sit down and speak with an attorney for an hour or so and you may leave more confused than when you went in. Legal-speak doesn’t translate into English very well, and not all attorneys are sensitive to that fact. It’s even possible you may be too confused – or even too intimidated – to ask any intelligent questions. 

With online trusts and wills, there’s no face-to-face meeting, no complicated legal terms, and no coming away wondering what really happened.

The process is standardized

Let’s face it, in virtually every field there are good apples and bad apples on the other side of the desk. While it may seem comforting to have an attorney prepare your trust or will, you’ll be completely at the mercy of his or her competence or sensitivity to your specific needs. If so, you may get a poorly prepared set of documents with overlooked or omitted provisions that are important to you. 

With online trust and will preparation, the process is standardized. There are no egos involved, no intimidation, and no personality clashes. You’ll go online, indicate the documents you want, and enter your relevant personal information. The documents are then prepared for you – and often reviewed by experts – then provided to you. 

There are three factors that can present complications with online trusts and wills: 

The degree of complication in your financial situation

If you have a fairly simple financial situation, online trusts and wills can get the job done for you. That may include a situation where you own your own home, have a retirement plan, and money in the bank. That’s a standard financial profile and one that includes few potential legal curveballs.

But the do-it-yourself route may not be appropriate if your finances are either more extensive or more complicated. 

Examples of these situations include the following:

• You own investment real estate, particularly multiple properties.
• You’re a business owner, and even more so if you have partners.
• There are minor children or other dependents who need to be cared for.
• Your estate is large and may incur a tax liability upon your death. (The federal threshold is $11.58 million for 2020, but state-level estate taxes can apply to an estate worth as little as $1 million).
• You own significant assets or business interests with a party other than your spouse.

Any of these circumstances and more may require special handling by an estate attorney. There may be specific state laws or provisions that will affect the distribution of your estate in unexpected ways. 

Special circumstances

If your estate will require provisions to accommodate complex situations, it may be best to have your will and trust prepared by an attorney.

Examples of special circumstances include: 

• You intend to disinherit a child or even a spouse.
• There’s a reasonable chance your will may face a legal challenge upon your death.
• You have a complicated tax situation with more than a slight chance of bringing in IRS auditors upon your death.
• One or more heirs need special care, perhaps even lifelong.
• You’re married but either you or your spouse have children from a previous marriage.
• One or more of your heirs is financially irresponsible, and you’d like to set up a long-term distribution plan rather than a single lump-sum payment.
• You want to make a provision for someone who is not a natural heir, such as a close friend or even a charity.
• You have a significant amount of debt that may be in existence at the time of your death.

Changes after the fact

Wills and trusts might not be nearly so complicated if life were more stable. Unfortunately, it’s not uncommon to experience major changes in life that, while not specifically financial in nature, will ultimately have a financial impact involving your estate.

Examples include:

• Marriage or remarriage.
• Birth or death of heirs.
• Divorce, either by you or by one or more of your heirs.
• Significant changes in state or federal tax laws that will require adjustments to either your will or trust.
• Receipt of an inheritance that will become part of your estate.
• Incapacitation, due to illness or injury, either by you, your spouse, or one of your heirs.
• A falling out with an heir.
• Major changes in either your assets, liabilities, or both.

When creating a will or trust it’s important to understand that the changes above (and more) may necessitate a redrawing of your documents, or at least significant modification. 

Unless you have a complex family or financial situation, you can use an online trust or will service to prepare either document. It will make certain your children are provided for, your assets are protected, and your final wishes are carried out. The process is simple and inexpensive, you can do it all from the comfort of your home, and either plan will be completely legal. 

Going without at least a will is playing with fire. If you die without a will, the disposition of your estate – and even the care of your minor children – will be determined by a court of law. A will gives you an opportunity to make those decisions in advance. And if you have significant assets, a trust will enable you to protect those assets, distribute them to who you want, and avoid the probate court potential that often comes with wills.

Given how simple and inexpensive online trusts and wills are, you should take advantage of this technological breakthrough to prepare the documents you and your loved ones will need.

When an online trust or will won’t make sense

If you have a complicated family or financial situation, you may need to use an attorney to prepare your will or trust.

A complicated family situation could be one in which there are children born outside your current marriage. Another example is where you want to exclude one or more children from your estate or trust.

An example of a complicated financial situation is a business. If you have partners or multiple owners in the same corporation, special consideration will need to be given to those individuals after your death. The same may be true if you have substantial business debts.

Unless you have a very complex financial situation, you should seriously consider taking advantage of online trusts and wills. Not only will it cost only a fraction of what you will pay to an attorney for the same service, but you may find it easier to create the will or trust of your choice online and in the comfort of your home or office, rather than sitting across the table from an attorney – with the fee meter running. 

Don’t be without a will, and if you want to create a trust, do it now. With all the advantages offered by online wills and trusts, there’s no reason to put it off any longer. The peace of mind you’ll get will more than justify the time, effort, and money spent making it happen.