When people try to create Trusts for themselves instead of using an experienced estate planning attorney, they quite often make mistakes. This is often true for people who even have some level of expertise and should know better.
Consider the case of Joseph Mohamed, Sr. He is a real estate broker and a licensed real estate appraiser. Mr. Mohamed has been very successful in his career. So successful, that he could take advantage of a Charitable Remainder Unitrust. This is a highly specialized Trust that allows someone to donate land to a Trust, continue using the land during their lifetime, take tax deductions for the value of the property, and leave the remainder of the land to charity after they pass away. Mohamed donated $19 million dollars worth of land to such a Trust.
However, when he attempted to take a tax deduction, the IRS disallowed it. The regulations say that the land must be independently appraised before it is put in the Trust. Mr. Mohamed’s own, expert opinion was not allowed. He did later get an independent appraisal in the hopes that the IRS would allow it. However, a tax court ruled that it was too late and that Mohamed cannot get a deduction.
The bottom line is that even if you think you know what you are doing, you should hire an attorney to create your Trust.