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One measure of national interest in this device is a sleeper bestseller titled How to Avoid Probate (Crown; $4.95). Written by Norman F. Dacey, who calls himself "America's best-known estate planner," the hefty paperback consists of a 50-page blast at lawyers and 300 pages of assorted forms that readers are urged to use in setting up revocable living trusts. In Dacey's version, a man puts most of his estate into life insurance, makes a bank trustee but directs the bank to invest the estate in a mutual fund. While the bank pays his heirs out of the trust income, the mutual fund turns a tidy profit in assorted fees.
Dacey's book appalls lawyers—and not just because the author is a nonlawyer whose main business is selling mutual funds. The charge is that Dacey's do-it-yourself forms can hardly be relied on amid the wildly disparate laws of all 50 states. Last week the American Bar Association denounced the book, warned that using the forms without the help of a local lawyer is an invitation to disaster—to say nothing of almost inevitable probate.
The A.B.A. itself sponsors a far sounder predecessor of Dacey's primer — a highly sophisticated film, written and narrated for U.S. lawyers by Harvard Law Professor A. James Casner, one of the country's top trust experts. To really beat probate, Casner stresses that the creator must "fund" a revocable living trust with as much as possible of his income-producing property before he dies—the more the better. Setting up such a trust may cost more than probate in lawyers' fees, trustees' fees and stock-transfer taxes. Even so, in many cases the trust can save post-death administrative expenses equaling as much as 10% of the estate. Moreover, it may be a godsend to older citizens yearning to let others take over their business headaches. In sum, the creator of a living trust can:
> Set up the trust in another state with more advantageous laws than his own state.
> Watch his trustees in action and change the trust if necessary, while providing continuous, legally invulnerable management of his affairs in the event of his illness or incompetency.
> Deter attacks by disgruntled heirs and creditors—largely because the trust, unlike probate, is an unpublicized fait accompli.
> Avoid the endless probate delays that may disrupt his business, derail his investments, and otherwise cut his family's income after his death. With a trust, his affairs flow smoothly on.
Get Help. Clearly, a revocable living trust may be a wise move for those able to fund it—for example, people who own their own businesses or substantial stockholdings. But what of today's typical corporate executive, who may control relatively little tangible property? Affluent as he seems, most of his wealth may be locked in group life insurance and deferred retirement benefits. To name his wife as beneficiary may overwhelm her with unaccustomed financial problems, but to set up a trust in his will consigns her to probate.