Do a Google search for “digital wills” or “online estate planning,” and you’ll find dozens of different websites offering low-cost, do-it-yourself (DIY) and sometimes even free estate planning documents, such as wills, trusts, powers of attorney, and healthcare directives.
From LegalZoom® and Rocket Lawyer® to TrustandWill.com and FreeWill.com, these DIY legal documents might appear to be an affordable and simple way to tackle your estate planning, allowing you to complete it without the high costs of hiring a lawyer.
After all, you’ve been able to prepare and file your taxes online for years, is estate planning really that much different? And aren’t lawyers using the very same forms you find on these DIY document websites?
AN INCONVENIENT TRUTH
This kind of thinking is exactly what DIY and online estate planning services would like you to believe, but it’s far from true. In fact, relying on DIY or online estate planning documents can be one of the costliest mistakes you can make for your loved ones.
Remember, just because you’ve set up “legal” estate planning documents, it doesn’t guarantee they’ll function as intended when you—or more importantly, your loved ones—require them.
Without fully grasping your family’s situation, the types of assets you own, and the legal procedures that occur after death or incapacitation, you may risk making significant errors when crafting a DIY or online estate plan.
Even worse, these errors won’t become apparent until it is too late. The family members you intended to protect might end up having to sort out the problems or face a lengthy and expensive court procedure that could stretch over months or even years. Ultimately, using DIY or online estate planning documents might be more detrimental than having no estate plan, and here’s the reason:
A FALSE SENSE OF SECURITY
Creating your estate plan using online document services can give you a false sense of security—you think you’ve got estate planning covered, when you most likely do not. DIY plans might make you think estate planning isn’t necessary anymore, which can cause you to delay setting up a proper plan until it’s too late.
In this way, relying on DIY estate planning documents is one of the most dangerous choices you can make. In the end, relying on generic forms might lead your family to spend more money and experience more stress than if you hadn’t done any planning in the first place. 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 handled by you and trusted counsel to guide you.
PLANNING TO FAIL
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. Yet, as cheap online document services become more and more popular, millions of people are learning—or will soon learn—that taking the DIY route can not only fail to achieve this purpose, it can make things even more complex and costly for the people you love.
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, not the documents. Documents are 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.
Without proper planning and consideration, the documents themselves—wills, trusts, health care directives, and powers of attorney—aren’t worth the paper they’re printed on. And by proper planning, we mean having a trusted advisor who can help you anticipate all of the potential problem areas and conflicts—as well as potential opportunities—that could impact your plan, and then help you adapt your plan accordingly and create documents to ensure the maximum benefit (and minimum heartache) for your loved ones.
When done right, the value of this kind of estate planning is truly priceless because it results in the right plan for your family at the right budget for you, and it leaves your loved ones with not just a set of documents, but with a trusted advisor who will be there for them when you cannot be. And this is exactly what we as a Personal Family Lawyer® firm provide every client we serve through our Life & Beyond Planning Process.
In an upcoming article, we will explore our planning services in detail. For now, let’s examine five common pitfalls you might face with online DIY estate planning documents, rather than consulting a lawyer.
ONE SIZE DOES NOT FIT ALL
“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
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. By now, it’s fairly common knowledge that these are the legal documents needed in case you become incapacitated or when you die.
However, many people don’t realize that online legal document services and even many lawyers often overlook the necessary details these documents should contain. It’s crucial that these documents work effectively for your family when they need them most. Standard templates often don’t address the complexities of family dynamics, the specifics of your assets, or life’s changes. Despite the promises of DIY services, estate planning isn’t a one-time or one-size-fits-all task. Even if your assets and family seem straightforward, they often aren’t, and problems can arise that might endanger your loved ones.
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 one legal document everyone thinks they need most is the one legal document that actually accomplishes the least. Yes, you know you need a will, but a will alone doesn’t do much.
A will lets you decide who manages your affairs and ensures your assets are distributed as you wish after you pass away. However, simply having a will doesn’t prevent your family from having to go to court. Actually, if you only have a will, your loved ones will definitely need to go to court when you die. Additionally, a will is not useful if you’re unable to make decisions due to incapacitation. If you have young children, depending solely on a will to appoint their guardians can risk them being removed from your home and placed in 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. It may seem silly, but it’s true. We’ve encountered numerous families who approached us with an estate plan after the passing or incapacitation of a loved one, only for us to find that we couldn’t assist them because the documents were either unsigned or incorrectly signed.
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’ve begun a DIY estate plan and want it reviewed, reach out to us to learn how you can receive a complimentary Life and Beyond Planning Session. In this 2-hour session, we will examine what your current plan could mean for your family and assets and talk about the ideal next steps to safeguard your family’s future.
