The Dangers of Mass Production

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The Dangers of Mass Production

6/2/14

Mass production has made many consumer goods, from automobiles to cell phones, affordable to large numbers of people. Most of us appreciate the benefits mass production can bring. At the same time, we all know that mass production without close attention to quality control can be a recipe for disaster, resulting in unreliable products that don't perform correctly or are outright dangerous to use.

Mass production can be especially dangerous in estate planning documents. I have encountered several people over the years who obtained a trust from a "trust mill" of one sort or another. These trusts typically look very nice: they often come in a three ring binder, with extensive tables of contents and explanations of what each section of the trust is supposed to do. Such trusts are sometimes sold at estate planning seminars or even online. Sometimes these trusts are not drafted by attorneys at all, but by individuals practicing law without a license.

Unfortunately, while it is possible to "mass produce" such documents, people do not live standardized lives with standardized families and standardized assets. All too often, when I review these mass produced trusts, I find them full of provisions my clients do not understand and do not need. The trust mill has tried to squeeze the client's life into the shape provided by the mass produced trust, rather than drafting a document that serves that particular client's needs. I have seen mass produced trusts with beneficiaries' names garbled, contradictions within the trust itself as to which assets each beneficiary is to receive, distributions that add up to less - or more - than 100%, and other problematic provisions.

Sometimes these mass produced trusts are drafted for use in states with laws very different from Indiana and include provisions that are not valid or even comprehensible in terms of Indiana law. These problems are not hard to solve while the person adding assets to the trust is living, but often the problems with mass-produced trusts are only noticed once the original settlor of the trust is gone and the trust becomes irrevocable. At that point, the survivors find themselves burdened with a trust whose provisions are self-contradictory or extremely inconvenient.

Ironically, while mass produced goods tend to be cheaper than hand crafted goods, several of the trust-mill trusts I have encountered actually cost the client more than a better trust written by a local attorney would have cost.

If your assets are valuable enough to be held by a trust or other estate planning vehicle, such as an LLC (Limited Liability Company), I strongly recommend that you consult with an attorney of your choice who is familiar with estate planning tools and who is willing to sit down with you and discuss your estate planning needs. Some tasks are too complex - and too important - to be addressed with mass produced solutions!