If you search for “digital wills” or “online estate planning” on Google, you’ll find dozens of different websites offering low-cost, do-it-yourself (DIY), and sometimes even free estate planning documents From LegalZoom® and Rocket Lawyer® to TrustandWill.com and FreeWill.com all offer documents such as wills, trusts, powers of attorney, and/or healthcare directives.
These DIY legal documents may seem like an easy way to finally cross estate planning off your to-do list without having to pay a lawyer some serious money to assist you, especially since you’ve been able to prepare and file your taxes online for years. How different can planning your estate be? Lawyers are using the exact same forms I can find online and fill out myself anyway, right?
An Inconvenient Truth
Unfortunately, this is the exact sort of thinking that can cause problems for you and/or your family in the future and relying on DIY or online estate planning documents can be one of the costliest mistakes you can make for your loved ones.
The fact of the matter is that just because you created “legal” planning documents does not mean that they will actually work when you or the people you love need them. You need a thorough understanding of your family dynamics, the nature of your assets, and how the legal process works upon your death or incapacity unless you want to make serious mistakes when creating a DIY or online estate plan.
The sad thing is, these mistakes likely won’t be discovered until it’s too late and the loved ones you were trying to protect will be the very ones forced to clean up your mess. For example, they could get stuck in a costly and traumatic court process that can drag out for months or even years. All told, relying on DIY or online estate planning documents can actually be worse than having no estate plan at all—and here’s why:
A False Sense Of Security
If you use online documents to plan your estate, chances are you’ll feel a sense of security. With a DIY plan filled out, whether correctly or incorrectly, you likely won’t feel the need to have an experienced lawyer go through the planning process with you and make a proper estate plan.
In this way, relying on DIY estate planning documents can be one of the most dangerous choices you can make. Such generic forms cannot be expected to cover your personal situation and could end up costing your family even more money and heartache than if you’d never gotten around to doing any planning at all.
Because of crucial details that were missed, mishandled, or not even mentioned because they were outside of the norm and thus not included in generic documents, your family would end up not being able to rely on them. At least with no plan at all, estate planning would likely remain at the front of your mind, where it rightfully belongs until it’s been properly handled by you and trusted counsel to guide you.
One Size Does Not Fit All
A typical set of documents that you get from an online DIY estate planning service (and even many estate plans created by lawyers) will usually include three to five basic legal documents: a will, a financial power of attorney, a healthcare directive, possibly a trust, and a legal guardian nomination, if you have minor children. These are the legal documents needed in case you become incapacitated or when you die.
What isn’t adequately covered by any online legal document service or even by many lawyers is what needs to go into those documents, and what’s needed to ensure those documents actually work for the people you love when they need them.
You see, standard documents simply cannot address the real-life complexities of your family dynamics, your assets, and the ever-changing circumstances of your life. Contrary to what the DIY services would like you to believe, estate planning is not a one-size-fits-all, once-and-done kind of deal.
Planning To Fail
“In preparing for battle, I have always found that plans are useless, but PLANNING is indispensable.” -Dwight D. Eisenhower, Former U.S. President and Commander of Allied Forces during WWII.
The primary purpose of estate planning is to keep your family out of court and out of conflict in the event of your death or incapacity. However, with the rise of cheap online document services, millions of people are learning or will learn that DIY may not only fail to achieve this purpose, but further complicate the situation for your loved ones.
Most people assume that estate planning is all about filling out the right legal documents, but in reality the true value of estate planning is not about the documents themselves—it’s the planning aspect that’s most important. Documents are merely the byproducts of the plan and the outcome of counseling and decisions that require thought, consideration, and a true understanding of all the options and their potential consequences.
When we say properly planned documents, we mean having a trusted advisor help you anticipate all of the potential problem areas and conflicts, as well as potential opportunities, that could impact your plan. They then help you adapt your plan accordingly and create documents to ensure the maximum benefit and minimum heartache for your loved ones. This is exactly what we as a Personal Family Lawyer® firm provide every client we serve.
Let’s take a look at how DIY planning can go wrong by exploring the five of the most common failures you are likely to encounter.
5 Ways Your DIY Estate Plan Can Fail
Number 1: Thinking A Will Is Enough
One of the ironic things about estate planning is that the will, the legal document everyone thinks they need most, is the one legal document that actually accomplishes the least. A will can ensure the people you choose are the ones who handle your affairs and who ensure your assets go where you want them to go in the event of your death. However, a will still needs to pass through probate, so relying on a will alone guarantees that your family and friends must go to court when you die. Plus, a will only goes into effect after your death, so it doesn’t even come into play if you are incapacitated. Furthermore, if you have minor children relying on a will alone to designate their legal guardians could still leave your kids vulnerable to being taken out of your home and into the care of strangers.
Number 2: Improper Execution
You could have the best documents in the world, but if you fail to sign them, or sign them improperly, they will fail. We have seen family after family who brought us an estate plan after the death or incapacity of a loved one that we were not able to support, all because the documents were either not signed or were signed improperly.
To be considered legally valid, certain estate planning documents like wills must be executed (i.e. signed, witnessed, and/or notarized) following very strict legal procedures. For example, many states require that you and every witness to your will must sign it in the presence of one another. If your DIY will doesn’t mention that condition (or you don’t read the fine print) and you fail to follow this procedure, the document can end up worthless.
If you have created or started a DIY estate plan and wish to have it reviewed, contact us, your local Personal Family Lawyer® to see how you can get a Family Wealth Planning Session™ at no cost to you. During this 2-hour session, we will review what would happen to your family and your assets with your current plan and discuss the best next steps for protecting your family.
Next week in part two of this series, we will cover the remaining three ways your DIY estate plan can fail and leave your family at risk.
This article is a service of Levi Alexander, Personal Family Lawyer®. We do not just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Family Wealth Planning Session™, during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this $750 session at no charge.