Buyer Beware: The Hidden Dangers of DIY Estate Planning—Part 1
If you do a Google search for “online estate planning documents,” and you’ll find dozens of different websites. From Legal Zoom® and Willing.com to Rocket Lawyer® and Willandtrust.com, these do-it-yourself (DIY) planning services might seem like an enticing bargain. You complete and print out just about any kind of planning document you can think of—wills, trusts, healthcare directives, and/or power of attorney—in just a matter of minutes and the documents are typically quite inexpensive, with many sites offering simple wills for $50 or less. Some are even free.
These quick and inexpensive measures might seem like the perfect way to finally complete your estate planning, since you may not have the time to fully take care of it. Even if you realize these DIY plan won’t be as good as those prepared by a lawyer, at least it can serve as a temporary solution until you can find time to meet with an attorney to upgrade. These forms may not be perfect, but at least they’re better than having no plan at all, 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.
At least with no plan at all, planning would likely remain at the front of your mind, where it rightfully belongs until it’s handled properly.
Planning to fail
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.
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.
One size does not fit all
Online planning documents may appear to save you time and money but keep in mind, if you read the fine print of most DIY planning websites, you’ll find numerous disclaimers pointing out that their documents are “no substitute” for the advice of a lawyer. Some disclaimers warn that these documents are not even guaranteed to be “correct, complete, or up to date.” These facts should be a huge red flag, but it’s just one part of the problem.
Even if the forms are 100% correct and up-to-date, there are still many potential pitfalls that can cause the documents to not work as intended or fail all together and without an attorney to advise you, you won’t have any idea of what you should watch out for.
Estate planning is definitely not a one-size-fits-all kind of deal. Even if you think your particular planning situation is simple, that is almost never be the case. 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. To demonstrate just how complicated the planning process can be, here are 4 common complications you’re likely to encounter with DIY plans.
1: 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.
2: Not adhering to state law
State laws are also very specific about who can serve in certain roles like trustee, executor, or financial power of attorney. In some states, for instance, the executor of your will must either be a family member or an in-law, and if not, the person must live in your state. If your chosen executor doesn’t meet those requirements, he or she cannot serve.
3: Unforeseen conflict
Family dynamics are quite complex and there is no point in pretending otherwise. This is particularly true for blended families, where spouses have children from previous relationships. A general DIY service cannot help you consider all the potential areas where conflict might arise among your family members and help you plan ahead of time to avoid such disputes. Even the best set of documents will be unable to anticipate and navigate these complex emotional matters because they cannot react to your specific needs and circumstances—but we can.
Every day we see families ripped apart due to poor estate planning, but we also see families brought closer together as a result of handling these matters in the right manner. When done right, the estate planning process is actually a huge opportunity to build new connections within your family and our lawyers are specifically trained to help you with that.
4: 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.
Don’t do it yourself
As you can see with all of these potential dangers, DIY estate plans are a disaster waiting to happen. As we’ll show you next week, perhaps the worst consequence of trying to handle estate planning on your own is the tragic impact it can have on the people you love most of all—your children.
If you’ve yet to create a plan, have DIY documents you aren’t sure about, or have a plan created with another lawyer’s help that hasn’t been reviewed in more than a year, meet with us as your Personal Family Lawyer®. We can ensure that your plan will work exactly as intended if something should happen to you. Contact us today to learn more.
This article is a service of Levi Alexander, Personal Family Lawyer®. We don’t 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.
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