As we reach the end of this blog series about ChatGPT, I’m reminded of Jeopardy! legend and now co-host Ken Jennings. In the finale of a three-day tournament pitting him against the IBM supercomputer Watson, Ken wrote, as part of his final answer “I, for one, welcome our new computer overlords.”
That’s how I’m starting to feel……
In last week’s blog, ChatGPT wrote a will. But that’s relatively straightforward, right? What about writing a Trust Agreement?
Prompt: Write a trust agreement. John holds $3MM in trust for James until he turns 21.
Wait for it……
THIS TRUST AGREEMENT (the “Agreement”) is made and entered into on [Date], by and between John (the “Trustee”) and James (the “Beneficiary”).
WHEREAS, the Trustee holds $3MM of money in trust for the benefit of James; and
WHEREAS, the Trustee desires to hold and manage the trust funds for the sole benefit of the Beneficiary until he reaches the age of 21;
NOW THEREFORE, in consideration of the mutual promises and covenants set forth herein, the parties hereto agree as follows:
1. Creation of Trust
The Trustee hereby establishes a trust for the benefit of James. The Trustee shall hold and invest the trust funds in accordance with the terms of this Agreement.
2. Term of Trust
The trust shall continue until the Beneficiary attains the age of 21. On the Beneficiary’s 21st birthday, the Trustee shall distribute the entire trust fund to the Beneficiary, unless the Trustee determines that the Beneficiary is not yet mature enough to handle the full amount, in which case the Trustee may continue to hold the trust in trust until the Trustee deems it appropriate to distribute the funds.
3. Duties of the Trustee
a. The Trustee shall hold the trust property separate from any other property and shall keep accurate records of all transactions involving the trust.
b. The Trustee shall invest the trust funds in a prudent manner and in accordance with the standards set forth under applicable law.
c. The Trustee shall pay or apply the trust income and/or principal as necessary for the health, education, maintenance and support of the Beneficiary until he reaches the age of 21.
4. Powers of the Trustee
The Trustee shall have the power to do any act that is necessary or desirable for the proper administration of the trust, including the power to invest, reinvest, and sell assets of the trust. However, the Trustee shall exercise such powers in a manner consistent with his fiduciary obligations.
5. Distribution of Trust Property
The Trustee shall make distributions to the Beneficiary as permitted by this Agreement or as otherwise determined by the Trustee in his sole discretion.
6. Termination of Trust
Upon the Beneficiary reaching the age of 21, the trust shall terminate and the Trustee shall distribute the entire trust fund to the Beneficiary.
7. Governing Law
This Agreement shall be governed by and construed in accordance with the laws of the State of [State].
8. Entire Agreement
This Agreement constitutes the entire agreement between the parties and supersedes all prior negotiations, understandings, and agreements.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date first above written.
*every lawyer reading this does a facepalm*
Ummm…there is no settlor of this trust. Don’t we need one? ChatGPT is making me doubt the law. Why does the beneficiary need to sign? Does the trustee understand what they are getting into? Has anyone thought about the tax consequences? Is this even a trust? What is even a trust?
AI is great resource and it has come a long way. But when you give the general public a tool like this, you need to be VERY careful. As much as people want to avoid lawyers, if you are doing any planning with legal structures, we still need them.
If you’ve read my blogs over the years, you know I like to end with something funny:
Prompt: Write a funny joke about lawyers and chatGPT
Why did the lawyer refuse to use ChatGPT? Because he wanted to bill his clients by the hour, not by the keystroke!
Oh great. ChatGPT is hilarious too……