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 may seem like a cheap and easy way to finally cross estate planning off your to-do list—and do so without having to pay a lawyer big bucks to assist you. 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.
Keep in mind, just because you created “legal” estate planning documents that doesn’t mean they will actually work when you—or most importantly, the people you love—need them. Without a thorough understanding of your family dynamics, the nature of your assets, and how the legal process works upon your death or incapacity, you are likely to make serious mistakes when creating a DIY or online estate plan.
Even worse, these mistakes 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 or get stuck in a costly and traumatic court process that can drag out for months or even years.
In the end, 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 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 may even lead you to believe that you no longer need to worry about estate planning, causing you to put it off creating a proper plan off 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, such generic forms could end up costing your family even more money and heartache than if you’d never gotten around to doing any planning at all.
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 provide every client we serve through our Life & Legacy Planning Process.
In a future article, we will go into detail about how our planning services work, but first let’s look at how DIY planning can go wrong by looking at five of the most common failures you are likely to encounter when using online DIY estate planning documents, instead of working with 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.
But what isn’t common knowledge and 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. Even if you think your particular assets and family situation are simple, that turns out to almost never be the case, and you are likely to face one of the following issues that can leave your loved ones at risk.
5 Ways Your DIY Estate Plan Can Fail
Number 1 Way Your DIY Estate Plan Can Fail: 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 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. But a will does not keep your family out of court. In fact, relying on a will alone ensures your family and friends have to go to court when you die. Plus, a will doesn’t even come into play if you are incapacitated. And if you have minor children, relying on a will alone to designate their legal guardians could leave your kids vulnerable to being taken out of your home and into the care of strangers.
Number 2 Way Your DIY Estate Plan Can Fail: 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 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 them and act upon 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 Lawyer to see how you can get a 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 Casey D. Conklin. 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 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 or visiting my online calendar to schedule a Wealth Planning Session and mention this article to find out how to get this $750 session at no charge. Or if you would like some more information you can schedule a 30 minute consultation with me.