Using AI to Create Your Estate Plan: What Could Go Wrong?

Mark Pierce 0:00 I came to understand who the individual was who had written this trust was not a trust attorney. They had gone online and they had downloaded what AI gave to them. And what AI gave to them was not a Wyoming trust and identified five fatal flaws in that trust that would prohibit it from being a Wyoming trust. So if they were ever sued under it, trust wouldn't hold up and they had no asset protection. But they'd paid like $25,000 to get nothing.

Maggie Pierce 0:28 This is Keep What You've Built. Every week I sit down with my dad, attorney Mark Pierce, and we break down the asset protection strategies nobody talks about publicly. If you use AI and you want to keep and grow what you've built, we are recording this episode for you. I am Maggie Pierce, and this is Mark Pierce, the founding attorney at WyomingTrustAttorney.com. How are you doing today, Mark?

Mark Pierce 0:51 I'm doing great. Thanks. How are you?

Maggie Pierce 0:54 I am also doing great. So let's jump right into it. Uh this episode, we've gotten a lot of inquiries related to people either DIYing their trust or trying to DIY their trust, getting involved in online scams, uh, getting too involved with AI to the point where it's detrimental to them. And uh I think the purpose of this episode is to tell some cautionary tales about getting scammed and relying too heavily on AI and show people how they can avoid a bad outcome for their legacy plan. So starting with that, you told me a story the other day about a couple who had come to you recently with a an almost botched trust. Uh so I'd like you to tell that story.

Mark Pierce 1:40 Uh well, you're being too kind, it wasn't almost botched. So it was a New Jersey couple who had established a Wyoming trust through this online group, and I will not name them. Uh, but they are not attorneys. What they do is they land the client and then they refer them off to attorneys. And the difference between what they take in from the client and what they have to pay to the attorney goes in their pocket, which is really interesting because they give the attorney almost nothing, and that's just about what they get in return. So they came to me and they said, Hey, we need an attorney who's willing to give us a letter to a bank in Belize to open an account for this trust. I said, A letter. Uh-huh. I said, No, they don't want a letter, they want an opinion from me. Yeah, well, okay. So what do you want me to say? We need you to say these things. I said, Well, these are opinions. You know, the worst of it is I haven't seen your trust, so they sent the trust over. They didn't have a trust. They had a trust that was a Wyoming trust that was domiciled in Wyoming, and the trustees were the people who'd established the trust who lived in New Jersey. New Jersey residents cannot be trustees of a Wyoming trust under this particular statute. So I said, I'm not only not going to give you the opinion that you say is a letter, I'm not going to allow you to make referrals to me anymore because you don't have valid trust. You're a nightmare waiting to happen, and I don't want my name associated with you. So that's what I ran into. And I got into it, and the I came to understand who the individual was who had written this trust was not a trust attorney. They had gone online and they had downloaded what AI gave to them. And what AI gave to them was not a Wyoming trust, and identified five fatal flaws in that trust that would prohibit it from being a Wyoming trust. So if they were ever sued under it, trust wouldn't hold up and they had no asset protection. But they'd paid like $25,000 to get nothing.

Maggie Pierce 3:35 If somebody's watching this and is thinking about moving forward with a group that promises to make them a trust that they found online, because I think a lot of people it don't necessarily have somebody who can refer them to a legitimate trust attorney. How would you recommend people stay vigilant so that they make sure they don't get into a situation like that? Like what are some of the red flags that you might come across and just any words of advice for people?

Mark Pierce 4:05 Yeah, take a good hard look at the background of the attorney who's behind these things, right? First thing you can do, like in Wyoming, we're Wyoming Trust Attorneys. You know, I was born in Montana, Roundup Montana, but I went to Wyoming when I think it was three months old. You know, our family had been drilling oil wells in Wyoming since the late 1800s over by Newcastle. So we had a very substantial relationship to the area. When I put this Wyoming TrustAttorney.com together, uh, which was just this was recently, we have a had a previous affiliation, but we we put it together. You can pull me up and you can look at me online, right? You can go to the state of Wyoming and you see that I'm licensed there, I'm licensed to practice law there. You can go and you can pull videos, you can go and pull a great deal of background information on me to establish my legitimacy. But most importantly, I'm in Wyoming. You know, that might be your first indication that I'm a Wyoming attorney doing Wyoming Trust, licensed by the Wyoming bar. So you've got an attorney who says, you know, my name is Tim Buck too. I reside in New York, and yeah, I do Wyoming Trust. Okay, that's great. And there are some New York attorneys who do Wyoming Trusts, and they do a pretty good job for about three to four times of what I charge for the same thing, only probably a little bit better. So that's my advice to you. Really check out the attorney behind it. You know, you can go to our website, you can go back to another website that we established a number of years ago called Wyoming LLC Attorney, and you can see the legitimacy of what we're doing. We own real estate there. We live there. We're licensed there. We have contacts there. I deal with the Wyoming bar. I write checks out on an account in Wyoming. You transfer your money to an account in Wyoming. Those are all of the legitimate aspects to this trust that you're not going to find with a lot of the online organizations. And one other thing, you're dealing directly with the attorney, not through some independent third party.

Maggie Pierce 6:06 The next thing I'm wondering is if you've noticed an uptick in the amount of these types of scams since AI became accessible to the general public.

Mark Pierce 6:17 Yes, I have. It's interesting, you know, my wife teaches as an adjunct professor now. She's been retired for a number of years, so she's an emerito with a fairly major university. And she likes to teach kids. And she gets online and she does a lot of the interaction with the kids online through pre-reported uh podcasts, and then also with follow-ups and tests and whatnot. And kids will come through and they'll answer a question using AI. And what she finds is that those are the C answers. What she's looking for are the B answers and the A answers. And then she can also tell the answers that just quite frankly just copied AI to the page and said, here, that'll work. Well, it's the same way with trust. Do you want a trust that's a C trust? Maybe it works, maybe it doesn't. Maybe it gets a job when it's done, right? All those things that go in. Or do you want an A trust? The A trust comes from the person who's been doing it, who graduated at the top of his class, has spent a lifetime putting the thing together. The person who deals with you directly rather than through an independent third party who's been contracted for at 10 cents on the dollar. That's the difference, right? When you take and pay your $25,000 over to this guy, and the attorney gets $2,500 for drafting the trust, just exactly what did you buy? So there you are. That's that's my advice.

Maggie Pierce 7:37 Other than the one that we mentioned earlier, have you heard of more organizations that are using AI to draft trusts?

Mark Pierce 7:46 Yes, there are entire seminars advising attorneys how to use AIs to supplement their practice. And you have to be really careful with it. Because when you look at it, as I just explained, you get the C answer. You don't get the B or the A answer. And we're interested in selling A-grade products. So when you look at it, you still look at the background and you're looking to see whether or not this individual can go out and do the hard work of ascertaining where the nuance is in the statute. And I'll just give you an example. You go into these guys that do these LLCs online, and we created the phantom info income block on uh charging order restrictions in the state of Wyoming. So let's say that you have an LLC and it's owned by a husband and wife, and they get a judgment against them for something. And those creditors come and they take those membership interests that the husband and wife hold in an LLC, and the LLC has assets, okay? And they say, look, we want to foreclose against those assets. A Wyoming court says, no, you can't do that. All you can do is get a charging order. If and when a distribution ever comes out of that LLC to those individuals, guess what? You can get it as the creditor. Fantastic. Well, why would you send a direct distribution out of it? You send phantom income out of it. So what you do is you say, look, the trust the LLC is taxed as a distributive entity. So it can either pay the tax at the LLC level or it could distribute the income out. But just because you distribute the income out doesn't mean you contribute the money out, you distribute the money out. So let's say there's a $100,000 profit and a creditor has attached both these interests. Here's what it does: the LLC files a form that said we distributed the money out to the bank. So the bank owes the tax. Now the bank owes a $35,000 tax on a hundred thousand dollars worth of judgment that they'd never anticipated, and they have to pay the tax. The $100,000 stays in the LLC, going towards expenses. This is one of the fandom income operations that you can do to beat a creditor into submission to get a better settlement than the judgment they got against the LLC. And yet you don't see that in a C-grade LLC paper.

Maggie Pierce 9:57 So there's a lot of hype around AI right now and how great it is and how, you know, it can get a 180 on the LSAT and do all of these things. Why do you think that AI cannot produce uh legal documents and specifically trust documents adequately?

Mark Pierce 10:16 Well, you know, I think that if you want to see great trust, you can AI is absolutely perfect if you think that's all you need. Um the difficulty is that you have to look at the way that AI is put together, where whether it's Claude or any one of a hundred different AI presentations that are out there. What's how is that large language model put together? Here's the difficulty is that you have like somebody like Claude or ChatGPT, they're gonna go out and they're gonna take all the online information, synthesize it, and give you the answer that will apply across all of the responses that it got. So it gives you what it considers to be an average of everything that's there. So you get an average answer. The problem is going to be in Wyoming is that a great deal of the nuance to the trusts that are generated there, to the extent that they're litigated, will be litigated in the Chancery Court in Wyoming. The Chancery Court in Wyoming is not a public database because all those seals, all that litigation is sealed. So that AI model cannot get in to understand what's going on in the court itself. Attorneys aren't, you know, we're a little circumspect on releasing a lot of that information because why would we? It's nobody's business, it's our business. Plus, we have an attorney-client privilege. But we can speak generally about these things. So they're reflected in our documents, but they would never be reflected in an AI document. And so for that reason, you're going to get a lot of nuance from a document prepared by a Wyoming attorney that you would not get from AI. So AI is going to give you the mediocre version or the one that's applies to everything and applies to nothing at the same time. So that's my reservation about AI.

Maggie Pierce 11:53 Beyond the initial couple, do you have any other examples of VIY going poorly?

Mark Pierce 11:59 Yeah, I'm approached from time to time by attorneys outside the state of Wyoming who said, look, you know, I want you to review my work. And uh when I first started doing Wyoming Trusts way back then, I said, sure, I'll take a look at your work. And then I found in many instances the quality of the work wasn't really up to snuff. And I had to do, I couldn't do the revisions. I had to just scrap the trust and put a new trust together. So I quit providing out-of-state attorneys with reviews of what the work that they've done for a Wyoming trust. I just found it to be really difficult to do. So I got away from doing that. And it seems to me that a lot of times, I don't know if it's it's DIY on AI that attorneys pass off as their own work, or if it's just maybe they're just kind of delving into something that they don't know a lot about for the first time, even what could go wrong. I know that when I first started practicing trust law and doing a lot of bankruptcy work in Colorado in the 1980s, that I would go to these conventions in the 90s when they started getting going for the offshore trust, people doing a lot of Cayman Islands and stuff. And I would go to these things and I was in my 30s, and I'd walk in and everybody else was in their 60s because that's who did trust law, right? Just old guys. And it really kind of hit me that you know I was a young guy there. And it was interesting because they always looked over, like, who's this young kid? So that you know, you you know, they kind of bring into the fold. They start talking openly and honestly about it. And I felt like I learned a lot because, you know, the value of experience in the area, trust law brings everything into one box. And I've always felt, you know, as a CPA, as a statistician, and I love history, I think that I bring a lot to the table that you're not going to find most of the time because I'm old. And as a result, I've gone through all these battles. I know what works and what doesn't work and why it does and doesn't work. And I have fought it, right? I sat there in bankruptcy court and litigated this stuff. I have litigated this stuff in tax court. I've run into so many trust attorneys who've never been inside of a courtroom other than defend themselves on a DUI. So you look at that, you say, Where did you get your experience on this? Where did you get your tactile experience on this? Because there's nothing like sitting in front of a bankruptcy judge who looks down her nose at you with her like that. Did you have anything you wanted to say? And they said, and this is four o'clock in the afternoon on a Friday. And what they're really saying is, get it out quick because I want out of here. I've been working all week. That kind of stuff. So you learn to synthesize your arguments and you learn what works, what doesn't work, and what's just pure fantasy. And I find a lot of these people, these younger kids who just haven't got that litigation experience getting in front of us now saying, this'll work. And I've really thought it out. God, have I heard that before? And I find it to be so frustrating. So, you know, what works, what doesn't work. And my view is that you make it as simple as you can to be as effective as you can. So, what level of effectiveness do you want and meet the simplicity that gets to that rather than putting a bunch of gobbledygook in there? Because a gobbledygook just has a tendency to disrupt the thought process. And besides, most of these judges sitting there looking at that stuff, the more junk you've got in there, the worse it's gonna be for you. So, my my basic thought quality on this is you know, I'm a CPA, I'm an attorney, I've litigated these things, federal court, but at bankruptcy, and also in the district court, you know, and I've litigated these things in tax court. It puts a steal on it that you're not gonna get. So, how is it that somebody with 10 plus year, 10 minus, less than 10 years of experience come into this thing and say, I've been I've been a tax attorney for eight years, and you know, I've never been in front of a tax court, but I know the law and I can get these things done. I've got this full panoply of attorneys behind me who've done all these wonderful things, and you actually look at what they've done as nothing. And now of a sudden they're gonna help you. They're not gonna help you, they're gonna give you some fantasy for you to hide behind. I think to become a good trust attorney, you start to become a trust attorney in your own right after about 10 years of experience doing it.

Maggie Pierce 16:00 We've spoken pretty negatively about AI during this episode, but I know that you're not anti-technology or anti-AI necessarily. So do you think that there is room for AI at all when people are doing research on these topics? And uh, if so, where can AI be genuinely useful and where should they avoid it?

Mark Pierce 16:23 Yes, I use AI every day. And so what I do if if I get a question, and it's a difficult question, the first thing I do is I start to postulate it online to see what a general kind of consensus would be from AI to see where it is, where I've been and where I need to go. I want to see if I have a correct foundational starting base. So I use it for that. And then I start asking really pointed questions. And the more pointed your question is, the less likely it is that you're gonna get a collection of answers to it because those points become harder and harder to define over time. So you get a really good answer. And I uh recently did, I represented a client who was from outside of the United States who wanted to have a particular type of trust for a particular type of purpose. And I knew that there were some overlapping interests in the Internal Revenue Code that could really handstrong him, but hamstrung him, but I couldn't remember where they were, what they were doing. So I went on to the AI and I found them. And then I began remembering and I started thinking I thought, okay, wait a minute, here's how this issue works. And I began really dissecting each aspect of the statute down, down, down, down, down until I could get to something that said, okay, that makes a lot of sense to me. Then I put together a memorandum, and then I went and I looked up the source codes. I went back to the statute, I went back to I went back to the regs, I went back to the tax opinions, I went back to all these things to make sure that that was right. Then I had then I had the answer. But the baseline was established by AI and saved me a lot of time.

Maggie Pierce 17:51 So when a when a client is doing their own research, where do you think it makes sense for them to use AI in their research?

Mark Pierce 18:00 I'll be really frank with you. If you've got a client doing legal research using AI, you've got a fool for a client.

Maggie Pierce 18:09 Um, I see where you're coming from, but I think some people feel like they're doing due diligence by looking into it on their own and trying to figure out what exactly they're signing up for and what they should expect. So where where do you think it makes sense to draw that line between being adequately informed so that they're trying to be an engaged client and trying to understand what's going on versus somebody who becomes a hindrance to themselves because now they're an expert, you know? Quote unquote an expert.

Mark Pierce 18:40 If you want a general overall view of something, AI can give you a general overall view. It may not be that accurate, but it is general, it's overall. You're not going to implement it. But then once you've got that information, why don't you go to our website? We have a lot of information available to you. In fact, if you go into AI sometimes on Wyoming Trust, you'll find that our website's cited. So you go to our website, get rid of the AI, look at what we said there, and take it to heart because you know, this is what we're running into, and this is how we're preparing our documents and preparing our practice. So I think that's a good source for you.

Maggie Pierce 19:15 Okay, that's that's great. All right. Uh do you have any final thoughts on this topic or anything you want to leave people with before we sign off?

Mark Pierce 19:25 When we started Wyoming LLC attorney, my son came to me. He said, How do we price these products? And uh, I had been involved in online businesses before through telephony years ago. And I had learned a lot from it by people who were very good at marketing and sales. And so I looked at my son and said, start at the bottom, that way no one else will follow you. And I was exactly right because we started out offering LLCs at a price that no attorney in Wyoming or anywhere else could offer them. And that's how we became a success. We gave them more than what LegalZoom would give you for less money. And so as a result, we we found a niche in the market. So that was our strategy. And that is also the strategy that we've got with trusts. You're gonna find that the Wyoming trusts that we offer online and the services we provide have a real value, and we're still less than the average price online of what you're gonna find.

Maggie Pierce 20:18 And with those, you don't have to worry about the very common pitfalls of DIY or AI trusts.

Mark Pierce 20:25 Yeah, exactly right. And I was talking to somebody about this this morning on a podcast that I I like these guys in this podcast, and I said, Look, you know, at the end of the day, you're gonna pay whatever it is you pay for your asset protection trust, but it's less than half the price of a new Toyota. Is that not worth protecting your family and your businesses for? Give me a break.

Maggie Pierce 20:46 I think that's a pretty good place to end it.

Mark Pierce 20:48 Yeah. Yeah, I do too. Okay. Good. Well, we're done. Yay, thank you. This is a good job. I like it.

Maggie Pierce 20:54 Thank you. And thank you everyone for listening. We will see you next time. Thank you for listening to Keep What You've Built. If you're interested in speaking with Mark, you can schedule a meeting with him through the link in the show notes or by visiting WyomingTrustAttorney.com. If you've enjoyed the show, please rate it five stars or give us a like. We'll see you next time.