“Can’t I just use an online will creator?”
“My [son/sister/friend]’s estate is pretty small. An internet form will work for that, right?”
I am no stranger to the do-it-yourself approach—I’m married to an engineer, after all. We enjoy personally maintaining our bicycles, we do a lot of our own car maintenance, and we even attempted to sand and refinish our hardwood floors (that was less of a success story). Do-it-yourself estate planning has become much more prevalent in the past few years, and many DIY-inclined people consider using online drafting programs for their needs. Unfortunately, these do-it-yourself wills and trusts lack one important component of a solid estate plan: the advice and counsel of an estate planning attorney. In this newsletter, I will discuss some of the pitfalls people face when drafting DIY estate planning documents without an attorney. I will leave the quality of DIY documents and execution problems for a different time.
Online drafting software can produce a legally enforceable will; however, these estate planning documents are not the result of discussing goals, intentions, and circumstances with an estate planning attorney. Instead, it is up to the software consumer to decide whether to have a will or a trust-based plan, whether a durable power of attorney is necessary, or if it makes sense to provide an outright distribution to beneficiaries. Frequently, my clients come to my office convinced they need a will, and only a will. After talking, we may discover that a trust will work better for them. They may also learn the importance of having incapacity documents like a durable power of attorney and advanced medical directive. With à la carte estate planning, it is easy to select a single document and entirely neglect incapacity planning.
An estate planning attorney should also explain how to coordinate your assets with your estate plan by strategically using beneficiary designations and/or retitling assets. Improper funding with either a trust or a will can easily result in accidental disinheritances and burdensome, expensive administration. This is a particularly pronounced problem for people with testamentary trusts. Parents may include a provision in their wills to hold their children’s assets in trust until they attain a certain age; however, the parents will then circumvent the trust by listing their children as direct beneficiaries of a life insurance policy or IRA. Their children will then have full control of the assets at 18, and the guardian will have burdensome court oversight while managing the assets until the youngest child reaches that age of majority.
I have seen many do-it-yourself wills and trusts, from an entirely hand-written will on a notepad to trusts made from a home computer drafting program. In a staggering amount of cases, I see people unknowingly complete documents that are antithetical to their intentions. There are living wills where people want to expire naturally if they are terminal with no hope for recovery, but they accidentally select the option to never be taken off of life support because they misunderstood the language. In many cases I see people accidentally disinheriting intended beneficiaries. I have yet to see someone use a do-it-yourself will or trust to effectively disinherit an heir.
The biggest problem with making a mistake in your estate plan is that you have no second chance to fix it. When my husband and I discovered our foray into sanding and refinishing hardwood produced less-than-stellar results, we were able to call professionals to get the results we wanted. If there is an issue with your will that is discovered during administration, it is too late to fix because the “results” of the will are only visible at death. Similarly, if you are relying on a power of attorney to protect against a guardianship in the event of incapacity, you cannot sign a new POA after becoming incapacitated. Acquiring an online set of documents may initially provide peace of mind, but if there is a flaw or issue with the documents, you will never know unless you take it to an estate planning attorney for review.
It is tempting to think that, because you have a small estate or simple intentions, a DIY estate plan will suffice. Wills, trusts, and powers of attorney, however, are complex legal documents that can have very expensive and serious consequences. Always have an estate plan either drafted or reviewed by an estate planning attorney before assuming it fulfills your goals and objectives. You probably won’t get a second chance.