By John Shea
Chances are, you are probably familiar with at least a few of the popular names among the growing amount of software and websites offering ‘do-it-yourself’ estate planning documents including wills, living trusts, and power of attorney documents. These documents are produced via self-directed, fill-in-the-blank forms and usually boast extremely cheap price tags and vast time savings over the traditional attorney-driven model of preparing one’s estate documents. Many are pitched on television ads, or by celebrity financial planners and radio hosts as viable alternatives to collaborating with a lawyer to prepare a will or trust. On the surface, such products seem to make a lot of sense, promising “peace of mind” at a very affordable price. But can such peace of mind really be achieved for a few bucks and a half hour or so of your time? Let’s find out.
Know that anyone can have a complicated estate.
Before meeting with an estate planning attorney, many people would assume that their estate planning needs are simple, because they are not from their vantage point, “rich”. Frankly, I am not even a huge fan of the term ‘estate planning’ because for many it invokes images of butlers, private jets, and 4-car garages stuffed with Rolls Royces and Lamborghinis. Many of my clients share with me that they never really thought they needed ‘estate planning’ because they don’t view themselves as having an ‘estate’. Sadly, the myth that estate planning is only for the wealthy is one that continues to hurt millions of Americans, mainly through messy, expensive and in many cases totally unnecessary probate court experiences for the loved ones of those who pass on. My personal belief is that estate planning is not a one-size-fits-all proposal and that every adult over the age of 18 needs estate planning in some form or another.
Many proponents of diy estate planning offer that while a fill-in-the blank document may not be as comprehensive as one generated by an attorney, many people do not need anything more than the basic, general document that can be purchased through diy websites such as LegalZoom. Furthermore, even a rudimentary will is better than having nothing in place at all. While I would certainly debate the former, the latter point is generally true; having a diy estate plan is in most cases indeed better than nothing. For some, financial constraints may simply leave them with little option besides a DIY will or trust (typically between $50-$200). For others, how effective a self-directed estate plan will be for them really hinges on a couple questions, namely, “how simple is your estate?” and “how much are you willing to risk that you can nail the form filling that ultimately generates your will or trust?”
Let’s start with the first question, and consider how simple or complex an individual’s estate planning needs may be. As previously stated, many people believe that their needs are modest, but many factors can come into play other than money when preparing an estate plan. For example, is your marriage a blended union? Blended marriages can bring many intricacies and variables to the table that require far more than a generic form-will can hope to offer. Are you the parent or guardian of a child with special needs? Again, this is a situation that simply cannot be properly addressed through the creation of a fill-in-the-blank document. For those with larger estates, who are subject to estate tax issues, again, I can almost assure you that print-at-home documents will not address your very specific needs. By the way, don’t dismiss yourself from this category without considering any life insurance policies you may have purchased or obtained through work!
DIY Legal Documents: "Are you feelin' lucky?"
For anyone whose situation looks similar to the examples outlined above, I strongly and without reservation recommend that you consult with a reputable, experienced estate planning attorney to review your estate planning needs. However, even for those who are not in those specific categories, diy estate planning is far from a no-brainer. One popular site specializing in the creation of diy estate planning documents, LegalZoom, makes no bones about the fact that their services are not intended to be a substitute for getting legal advice from a licensed attorney. The importance of this statement cannot be overstated, especially when you consider that again by their own estimation a whopping 80% of the people using their services make mistakes when filling out their documents! This is obviously an astounding statistic, and begs the question first famously asked by Clint Eastwood, “are you feelin’ lucky?” In fairness, LegalZoom assures that they have professionals ready to help, but remember that LegalZoom and the many sites like it are not law firms, meaning that they are not permitted to give you legal advice or specific review of your documents, but only offer broad, general information that may or may not be what you need to complete your documents correctly. Unfortunately, many who make potentially costly mistakes with regard to their will or trust will never discover their mistake. Instead, the price will be paid by the very loved ones that the documents were ironically originally executed to protect.
Another factor that must be considered when deciding whether to execute a diy estate plan is the undeniable fact that laws affecting estate planning are constantly changing. A competent estate planning attorney can and should help you keep your documents up to date through periodic reviews and appropriate, timely recommendations. DIY documents force their executors either to keep abreast of the changing laws themselves, or risk their documents being rendered effectively useless or have their power greatly diminished by the ever-shifting sands of new legislation. New jobs, children, marriages (and subsequent family members) are just a few of the multitude of issues that can also affect an estate plan, apart from changes to the law. Again, these are things that a quality estate planning attorney who values and curates the resulting relationship formed in working together will help you navigate. A DIY program cannot offer such levels of service.
You get what you pay for.
In summary, a DIY will or trust certainly offers advantages if the only alternative strategy is no planning at all. For individuals or families having only the most basic estate planning needs, they may be a viable option, IF they are willing to roll the dice on actually being able to complete the documents correctly and without potentially critical errors. However, as the old adage says, “you get what you pay for”. An experienced estate planning attorney does much more for their client than simply drafting documents. They will be able to answer specific questions, make personal recommendations, and most importantly forge lasting relationship with their client, understanding that estate planning is never static, but always adapting and changing to both shifting political climates as well as the natural changes inevitably occurring within their clients’ lives.
The information in this blog post is based on general legal and tax rules and is strictly for informational purposes only. It is not intended as legal or tax advice. Readers should consult their own legal and tax advisors as to their specific legal or tax situation as it may require more complex analysis, or the consideration of other information.